Rosneft, Trafigura-UCP consortium announce acquisition of Essar Oil

Essar_Oil_Deal

Russian oil major Rosneft, along with a consortium comprising Trafigura and UCP, announced completion of a USD 12.9 billion deal to acquire private refiner Essar Oil, strengthening ties between the world’s largest oil producer and the fastest growing fuel consumer.

Rosneft will get a 49.13 percent stake in Essar and the Trafigura-UCP consortium (via Kesani Enterprises Company Limited) will get another 49.13 percent stake. The remaining 1.74 percent stake will be held by retail shareholders, Essar said in a press release.

“For Essar, the closure of this landmark transaction ushers in a new phase of growth across our portfolio of businesses that hold great promise in India’s enduring development story,” Essar Founder Shashi Ruia said.

The deal has helped Essar de-leverage its portfolio substantially and reduced debt by over Rs 70,000 crore, Ruia said in a press conference.

From the deal, USD 3.5 billion will come to India. Rs 4,000 crore of the deal will be used to pay debt from Indian banks, LIC and insurance companies, he added.

Shareholders, who did not participate in delisting process will get shares in the holding company.

The deal includes Essar Oil’s 20 MTPA, 400,000 barrel-per-day oil refinery in Vadinar, its pan-India network of over 3,500 retail outlets and the associated refinery infrastructure.

[reuters]

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