ESSAR Energy, the Indian resources group that is gearing up for a £2bn-plus London flotation, is set to hire a well-known City director to address some of the corporate governance concerns that have dogged the early phase of its flotation process.
Sources close to Essar say the new director should be in place within the next four weeks, days before the pricing of the group’s shares.
The new director will take the total of independents on the board up to five, giving the group a majority against the three directors who are all associated with the Essar Group, the parent company that will own 75 per cent of Essar Energy’s shares after the listing.
Some potential investors have suggested that Essar Energy should have an independent chairman to ensure that the group retains complete independence from its Indian parent and protects the interests of its minority shareholders.
But Essar has no plans to deviate from its current plan which is to have Ravi Ruia as chairman and his nephew Prashant Ruia as vice chairman.
“It is crucial to the success of the company that these two family members are fully signed up,’ said one source close to the company. “But we are always listening,” he added.
Essar Energy’s management team will head off for an international investor roadshow within the next few days, taking in New York, San Francisco, Europe, Hong Kong and Singapore.
After that will come publication of a pathfinder prospectus before the shares are priced in around a month’s time, just after the UK elections.
Essar plans to use the $2.5bn (£1.6bn) proceeds from the float to invest in some of its existing growth projects, such as the development of captive coal mines to expand the group’s energy capacity.