Essar raises $147m by selling FCCBs

MUMBAI: Ruias-controlled Essar Oil on Friday raised $147 million (about Rs 687 crore) by selling foreign currency convertible bonds (FCCBs) to part-finance its expansion plan.

The promoters have subscribed to the FCCBs, which can be converted into equity shares in 2028 at Rs 153 apiece, the company said in a regulatory filing. The Essar stock gained 2.1% to close at Rs 143.30 in a strong Mumbai market.
In June, Essar Oil announced that it would raise $300 million (approximately Rs 1,400 crore) from the promoters . It had already raised $115 million through a similar bond issue last month.

The proceeds of the issue will finance the company’s $1.7 billion expansion plan that includes scaling up its Jamnagar refinery capacity by 25% to 375,000 barrels and increasing its complexity from 6.1 to 11.8 by next year. Higher complexity implies the refinery has higher ability to process feedstocks into value-added products.

This round of fund infusion will take the promoters’ contribution in Essar Oil to nearly $1 billion for modernisation and expansion of the refinery . London-listed Essar Energy Holdings , the promoter of Essar Oil, raised $1.94 billion through an initial share sale at London Stock Exchange in May. In addition to Essar Oil, it owns a 50% stake in a Keyan refinery. It also runs four power plans with an installed capacity of 1,220 mw.