Russian oil giant Rosneft and partners acquire Indian Essar Oil
The Russian company bought about 49 per cent stake in Essar Oil’s refinery port and petrol pumps and the other 49 per cent equity was took over by one of the world's biggest commodity trading companies, the Netherlands-based Trafigura Group Pte and Russian investment fund United Capital
Moscow: Russian state-controlled oil giant Rosneft and its partners on Saturday acquired India's second biggest private oil firm, Essar Oil, in an all-cash deal of about $13 billion.
The Russian company bought 49 per cent stake in Essar Oil’s refinery port and petrol pumps and the other 49 per cent equity was took over by one of the world's biggest commodity trading companies, the Netherlands-based Trafigura Group Pte and Russian investment fund United Capital Partners equally.
The remaining 2 per cent is held by minority shareholders after delisting of Essar Oil.
The deal includes Essar Oil's debt of $4.5 billion, about $2 billion debt with the Port Company and power plant and about $3 billion dues to Iran for past oil purchases.
The deal was announced at the 17th India-Russia Annual Meet during BRICS Summit 2016. The PM said that it is the single largest foreign investment in the Indian refining sector. “The deal will strengthen the ties between the world's largest oil producer and the world's fastest growing fuel consumer,” stated the Indian Premier.
The Essar Oil:
- Controlled by the billionaire Ruia brothers, Essar Oil operates as many as 405,000 barrels in a single day at refinery in Vadinar in Gujarat. The refining complex also has a captive power plant as well as a port and terminal facilities.
- The Indian oil giant said that it has signed two agreements for the sale. "An additional amount of Rs $2 billion will be paid for the acquisition of Vadinar Port, which has world-class storage and import and export facilities," it said.
- The deal would help the Essar Group to trim it’s over $13 billion debt. It is currently one of the country’s largest and most indebted companies. The all cash deal is expected to close in first quarter of 2017.