Following the fund raising, Essar Projects has become the first Indian company in 2005 to raise money through the GDR route. The company has placed 15.82 lakh depository receipts (DR) at a price of $54.35 per DR, to raise $86 million (approximately Rs 375 crore). With this, the company is said to have achieved the financial closure for the Vadinar project.

Sources close to the development said that Essar Projects would use the funds mobilised through the GDR for the construction of the group’s Vadinar refinery. The company, however, declined to comment on the shareholding pattern of Essar Projects after the issuance of GDR. Prior to GDR, Essar Projects was a 100% Essar group holding company.

The other two companies, Essar Oil and Essar Shipping, on February 1, 2005, have already said that they have successfully completed the issuance of $213 million foreign currency convertible bonds (FCCB). Essar Oil raised $166 million through FCCBs to part finance the cost of the 10.5 million tonne per annum oil refinery project being set-up at Vadinar.

Essar Shipping raised $47 million to part finance the cost of the Vadinar oil terminal project that is being set-up at Vadinar through its wholly owned subsidiary Vadinar Oil Terminal. The Essar group has mobilised a total of $299 million including the GDR issue and the FCCB issues to complete the financing for the refinery project. As per the debt restructuring agreement, the Essar group had to raise $299 million for the banks to pump in rest of the Rs 8,000 crore for the Vadinar project. Around nine banks led by ICICI Bank had already tranferred the Rs 8,000 crore into a escrow account, which the Essar group could use after mobilising $299 million for the project.