Essar Oil to take FCCB route to raise $300 mn

MUMBAI: Essar Oil will raise $300 million (around Rs 1,396 crore) by selling foreign currency convertible bonds (FCCBs) to its promoter to part finance its expansion, it said in a stock exchange filing.

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 3,75,000 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 to nearly $900 million 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 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. Essar Oil stock gained 4.4% to close at Rs128.95 in a flat Mumbai market.