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Essar Energy cuts London IPO price to 420 pence

Essar Energy cuts London IPO price to 420 pence
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First Published: Fri, Apr 30 2010. 09 05 PM IST
Updated: Fri, Apr 30 2010. 09 05 PM IST
Mumbai: Essar Energy has lowered the price for its London initial public offering (IPO) to 420 pence (Rs287) per share, people familiar with the matter said on Friday, below the targeted range of 450-550 pence.
The firm, which had planned to raise up to $2.5 billion (Rs11,150 crore), has sent a term sheet to investors with the new price, one person said on Friday. The number of shares to be sold in the deal was yet to be determined.
An Essar spokesman declined to comment.
The deal was being priced in a difficult week for markets globally, with investors skittish after Greece’s sovereign debt rating was downgraded.
Essar Group plans to sell a 20-25% stake in Essar Energy and will use the proceeds to fund projects including the acquisition of coal mines and the development and exploration of oil and gas blocks, the company said earlier in April.
The group’s energy and power operations, including four existing plants with a total installed capacity of 1,220MW, will have a market capitalization of around $8.5 billion upon listing, the people familiar with the developments said. They didn’t want to be named.
The firm was previously expected to have a market value of $9.5-11 billion.
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First Published: Fri, Apr 30 2010. 09 05 PM IST