The Essar group has paid around Rs 3,825 crore ($850 million) to ramp up its holding in two group companies, Essar Shipping and Essar Oil, by buying out global depository receipts from international investors.
While the group's stake in Essar Oil has gone up to 87 per cent from 20.12 per cent (including persons acting in concert) now, its stake in Essar Shipping has moved up to 76 per cent from 47.25 per cent.

Essar Global, the offshore investment company of the group, took loans from a clutch of foreign banks to finance the deals. An announcement to the stock exchanges is expected any day now. When contacted, Essar executives declined to comment.

Vadinar Oil and India Shipping, wholly owned offshore subsidiaries of Essar Global, have struck block deals with international investors to purchase 728.4 million GDRs of Essar Oil and 124.4 million GDRs of Essar Shipping. Investment banking sources said the buyout would cost the Essar group around $850 million at the ruling market price.

The group, however, will not come out with any open offer, as the purchase of global depository receipts do not trigger the mandatory offers for minority shares. Regulation 3(ii) of Sebi's Takeover Code exempts companies from launching open offers following purchase of global depository receipts.

Essar Shipping, a sea logistics company, has a fleet of 27 vessels, comprising bulk carriers, tankers and mini-bulk carriers. Essar Oil, the petroleum retail company of the group, is setting up a 10.5-million-tonne refinery in Jamnagar. It is also engaged in exploration and production of oil and gas.Investment banking sources said CLSA Equity Markets arranged the block deals between Essar Global and the investors.