MUMBAI (Commodity Online): India-based Essar Oil is said to seek the shareholders' approval next month to spurt up to USD 1.7 billion in order to finance its expansion plans, while its unlisted parent said it had agreed to buy coal mines in Indonesia.
Essar Oil had passed a resolution in December 2007 to raise up to $2 billion either through convertible bonds, or global or American depositary shares, and it later issued $300 million worth of global depositary shares.
The parent Essar Group said it had signed an agreement to purchase Aries coal mines in Indonesia as part of its strategy to source raw materials for its power operations, Essar Power. Financial details of the coal mine deal were not disclosed.
An industry source put the value of the deal at $175 million to $200 million. Essar said in a statement the acquisition would give its power unit access to an estimated resource base of 100 million tonnes of thermal coal and mineable reserves of 64 million tonnes.
Essar Group plans to surge about $2.5-$3 billion by listing its energy and power businesses on the London bourse in late April, sources told, tapping new investors to fund its ambitious expansion plans.
Essar Oil's shareholders' meeting will be held on April 22, the company said in a notice to the stock exchange.