London Stock Exchange-listed energy giant Essar Energy has reported remarkably strong jump in revenues and operating profit for the six-month period ended September 30.
In the April-September period, Essar Energy's revenues jumped 97 per cent from the previous eight months to settle at $12.84 billion, thanks to its acquisition of Shell's Stanlow refinery. Essar Energy had acquired Stanlow refinery in July last year for $350 million.
Essar Energy, which is promoted by Ruia brothers Ravi Ruia and Shashi Ruia, has announced a pre-tax loss of $1.15 billion during the 15 months till March 2012.
The company has moved from accounting period till the month of December to the April-March accounting period and has thus reported the results for a period of 15 months. London-listed Essar blamed the negative ruling by the Supreme Court in a tax case for the pre-taxation loss during the period.
Essar Energy has said that its core earnings fell by 10 per cent comaprd to the same period previous year.
The company's earnings before interest, tax, depreciation and amortisation (EBITDA) for the calendar year 2011 was at $624.8 million compared to $696.5 million in 2010. The figure is worse than market expectations.
Essar Energy has entered into an association with Shell’s refinery. It has been decided that Essar Energy will buy Shell’s refinery at Stanlow, on the south bank of the Manchester Ship Canal near Ellesmere Port in Cheshire.
But in case the energy company decided to back out of the acquisition, it will be liable to pay a break fee of $50 m and if Essar proceed with the buying but Shell decided not to proceed with the offer, it will be liable to pay $10m fee. Shell will be given three days time to decide whether to accept the proposal or reject it.
Navbharat Power which is being set up in Dhenkanal in Orissa is being purchased by Essar Power. The UK listed, Essar Energy has announced the intentions of its subsidiary towards the 2250 MW coal fuelled power plant. EPL will put their money into 76% of the current equity and the rest is expected to be bought as certain project targets are accomplished.
A joint venture between Malaxmi Energy ventures and Nava Bharat Ventures, Navbharat power has been granted all the major clearances and even the coal linkages are in place, with the land acquisition process currently in progress.
Indian conglomerate, Essar Energy failed to raise the expected amount from the London Stock Exchange (LSE).
It had expected to raise $2.5 billion from the capital markets, but fell short by $550 million. The reason for this was the falling markets and finally the company had to give up.
Essar Energy is into the business of oil and gas. The final price of its shares was 420p. This is less than 450-550 p range that was given by the company.
This was supposed to be the biggest listing that the stock exchange has seen in the last few years.