Outlook To look at Essar Energy's trading update, you could almost believe this was nothing out of the ordinary. Move along, nothing to see here, business as usual.
Not a particularly pretty business, as evidenced by the trading update, but every company hits a bit of a sticky patch now and then, don't they?
So why is the City so cross? Behind closed doors, institutional investors are giving off more steam than one of Essar's refineries.
Well, there is the Ruia family's potential takeover bid, and the trading didn't give much of an update on that other than to say that, yes, they might buy the shares they floated at 420p back for just 70p.
Hence all the bluster (in private). If there's a part of your pension, ISA or unit trust in there, you can be reassured. Your fund managers have got your back. At some point they might even publicly say so.
Amid all the howling and gnashing of teeth, the company's independent directors have scurried to call in lawyers from Linklaters and establish a committee to consider the (potential) bid. So they're obeying the forms.
In reality, they know, and the institutions know, that the Ruias have them over a barrel. They either sell now for the pitiful price suggested or sit tight as the shares drift further down a black hole.
The question that really needs to be asked is why they let it get to this place. No one forced institutions to listen to the likes of JP Morgan and Deutsche Bank when they were selling the thing. The scale of the disasters at natural resources horrors Bumi and ENRC might not have been completely clear back in 2010 when Essar floated, but the dangers of having big, majority investors with the freedom to call the shots alongside you, ought to have been pretty clear.
It's true that the listing rules that allowed the float were too weak. They're still not tough enough. But that offers the institutions too easy an out. If big investors don't want to find themselves in the same place, they need to learn their lessons. The next time a someone comes with a similar offering they should be sent packing.