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Essar Energy - India (ESSR)     

HARRYCAT - 23 Jul 2010 14:56



July 2010 - Market Cap of £6bn ; Founded in 1969.
Floated on the LSE in May 2010
Indian parent Company Essar Group comprising Essar Oil & Gas, Essar Power.
Specialising in power generation & oil & gas operations in India

http://www.essarenergy.com/

HARRYCAT - 21 Aug 2010 14:59 - 3 of 100

Slightly edited version of article written by Martin Waller in the Times, following the resignation of the CFO:
"When it came to the London market in may, ESSR was the biggest float by a foreign company for three years & the biggest float by an Indian company. But the shares, on what was admittedly an inauspicious day for anyone to debut, sank 7%. They were largely mistrusted & we begin to understand why.
In January Jerry bacon was appointed CFO. This summer he decided to retire, to study the History of Art at Reading Uni. This was communicated to the markets in the interim figures. Mr. Bacon says he has no wish to discuss his private life, nor should he have to, but questions need to be asked not least because ESSR, as a high-growth company, is asking investors to take a lot on trust.
According to Deutsche bank's estimates, the shares sell on 55 x this year's earnings, shrinking to 15 x next year's. This suggests some ambitious plans & ESSR is spending $11bn over the next four years, $1.5bn in the first half, to achieve it. India is not the easiest place to do business & there must be some doubt as to whether those plans are achievable. It takes a lot on trust & the departure of the main money man so soon does little to foster this. AVOID."

HARRYCAT - 21 Aug 2010 15:00 - 4 of 100

StockMarketWire.com
"Essar Energy's first half pre-tax profits fell 34% to $154.4m.

Revenues for the six months to the end of June rose 66% to $4,764.8mand net debt fell 27% to $2,221.8m.

Essar said 16 major growth projects were under execution or at advanced stages of development with capital expenditure of more than $1.5bn compared with $0.3bn a year ago.

Essar said the first half of 2010 was a period of transformation with the initial public offering raising £1,274.4m - the largest primary offering in the London market since 2007."

halifax - 21 Aug 2010 16:32 - 5 of 100

cynic we know you "love" chinese companies how do you feel about investing in indian companies?

cynic - 21 Aug 2010 16:43 - 6 of 100

an awful lot better!

dreamcatcher - 01 Jan 2012 20:16 - 7 of 100

The Sunday Times - Share tips for 2012 - Published 1/1/2012
Today's Business section of the Sunday Times has an article called "Our share tips for 2012" in which Sunday Times staff pick the shares they believe will do well in 2012. Their share tips for 2012 are:

Essar Energy - "Fill your boots

robertalexander - 01 Jan 2012 21:49 - 8 of 100

DC,
Could you post all the Times tips on the 2012 views and tips thread please.

Alex

HARRYCAT - 02 Jan 2012 15:44 - 9 of 100

Well, having flagged this one up in June 2010, it has truly performed abysmally, and difficult to know if this is the bottom or not.

dreamcatcher - 02 Jan 2012 15:57 - 10 of 100

Will keep one eye on them.

This news put out on Dec 21 2011
Essar chairman stands aside after allegations
StockMarketWire.com
Ravi Ruia has decided to temporarily step aside as chairman of Essar Energy, the India-focused integrated energy company, although he will continue as a director.

This decision follows allegations by India's Central Bureau of Investigation (CBI) that Mr Ruia and certain other executives of the Essar Group, and Essar Teleholdings, an Indian company belonging to the Essar Group, had suppressed facts relating to the extent of its equity holding in Loop Telecom Limited.

There are no charges of bribery or corruption or collusion with public servants.

The allegations relate principally to a certification given by Loop Telecom at the time of grant of Universal Access Services licenses (mobile telecom licenses) that Loop was in compliance with Clause 8 of the guidelines under which such licenses were issued.

This clause prohibits any shareholder company (directly or through its associates) from holding 10% or more equity shareholding in more than one mobile licensee company.

Essar Group says it is surprised and disappointed by the stand taken by the CBI especially because the Indian Ministries of Law & Justice and Corporate Affairs have already reviewed the facts and confirmed that the direct and indirect shareholding of the Essar Group in Loop was below 10% and therefore there was no such violation and that no prima facie case of any offence can be made out.

Mr Ruia and Essar Group deny all charges and intend to take legal recourse to defend their position. These charges do not relate to Essar Energy, or any of its businesses and subsidiaries, and are not expected to have any impact on Essar Energy's business operations.



At 11:10am: (LON:ESSR) share price was -2.2p at 175.8p






hlyeo98 - 17 Jan 2012 16:16 - 11 of 100

Now ESSR will need to pay huge tax imposed by Indian government.

dreamcatcher - 17 Jan 2012 16:21 - 12 of 100

Correction: Supreme Court order on Sales Tax Case
RNS
RNS Number : 7163V
Essar Energy plc
17 January 2012





Correction: Supreme Court order on Sales Tax Case



January 17 2012: Essar Energy plc's [LSE: ESSR] subsidiary Essar Oil Limited today made the following announcement to the Bombay Stock Exchange:



Today, the Hon'ble Supreme Court has set aside the judgment of the Gujarat High Court by which Essar Oil was entitled to avail of Sales Tax Deferment Scheme, ie, to pay Sales Tax to the State government in deferred installments. The company has availed of approximately INR 63 billion (approximately US$1.235 billion) of Sales Tax benefit which was to be paid in deferred installments.



The company will provide further information in the matter after studying the judgment passed by the Hon'ble Supreme Court.





Notes to editors:

1. This case relates to the Gujarat state's Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000.

2. The Supreme Court of India set aside the earlier judgment of the Gujarat High Court that extended time to Essar Oil Limited for the commencement of commercial production of the Vadinar Refinery. Under the original incentive scheme the Vadinar refinery was required to commence commercial production by 15 August 2003 but the actual commencement of commercial production was after this date. Sales tax collected to date totals approximately US$1.25 billion.

3. Essar Oil Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and is a subsidiary of Essar Energy, which owns 87.1 per cent of the shares.


dreamcatcher - 17 Jan 2012 16:22 - 13 of 100

Did not like the sound of the chairman.

dreamcatcher - 17 Jan 2012 16:26 - 14 of 100

Dont fill your boots as the Sunday Times said. :-))

aldwickk - 17 Jan 2012 18:56 - 15 of 100

Has there been any comment by The Sunday Times since they tipped it

dreamcatcher - 17 Jan 2012 19:05 - 16 of 100

It was only last Sunday they tipped this company. This news as I take it only come out today on the RNS. Your not going to invest are you aldwickk. :-))

aldwickk - 17 Jan 2012 19:42 - 17 of 100

No , but it could be worth a small punt

dreamcatcher - 17 Jan 2012 19:43 - 18 of 100

Sorry it was tipped 1st Jan, have not seen a article about the tip. Being fair they like all investors had no idea this RNS would come about.

dreamcatcher - 17 Jan 2012 19:46 - 19 of 100

Put £50 in in the morning and it will be a £5 by close. lol . You never know could be a good investment.

hlyeo98 - 18 Jan 2012 12:07 - 20 of 100

In India, Essar fallen 11% today.

cynic - 18 Jan 2012 14:07 - 21 of 100

this has been a stinker from Day1

HARRYCAT - 18 Jan 2012 14:30 - 22 of 100

Morgan Stanley note:
Yesterday’s court ruling in India could see Essar having to pay up to £650m in tax to the Gujarat state government, which ultimately could lead to default of loans at Essar Oil. This could lead to further defaults for the convertible bond and Stanlow working capital facility. Essar is looking to appeal the Supreme Court’s decision.

What has happened? Essar Oil, a subsidiary 87% owned by Essar Energy, received a negative ruling from the Supreme Court of India yesterday. This relates to a tax benefit for Essar Oil at its refinery facility (Vadinar) in the state of Gujarat. In the 1990s, to encourage investment in the state, Gujarat allowed certain tax holidays. Essar initially started building its refinery in the 1990s, but due to a severe cyclone, this disrupted building, and consequently it was not completed until 2008. The company went to the state high court to be allowed to receive the tax benefit, as it argued that the delay was outside of its control. It was granted this benefit. This decision to reverse at the Supreme Court repeals the state’s high court decision.

What is the tax benefit? Essar Oil is allowed to collect sales tax on goods sold, and does not have to pay this back to the state of Gujarat until 2021 (or until it exhausts its limit, which is Rs91bn).

Can Essar appeal? It believes it can put in a review petition to get the judgment reviewed again. This could take up to three months to get a decision.

How quickly will the tax have to be paid? This is unclear, but could be important. Under the current terms of repayment, the tax should be paid back in six equal annual instalments. The judgment from the Supreme Court is unclear on whether this holds, or whether an immediate payment will be required.

Is Essar Oil in default? Technically yes, but Essar had been negotiating with lenders to reorganize the structure and remove the sales tax issue as a covenant. We expect the lenders to wait to see the outcome from the legal process before taking further action.
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