Essar oil bought out by rosneft-led consortium for $13 billion

CHENNAI: A consortium led by Russian Oil major Rosneft has acquired home grown Essar Oil for nearly $13 billion. Rosneft and its partners on Saturday took over India’s second biggest private oil firm in an all-cash deal in the backdrop of the BRICS Summit in Goa which kicked off.

According official statements, Rosneft has bought a 49 per cent stake in Essar Oil’s refinery port and petrol pumps, while Netherlands-based Trafigura Group Pte, one of the world’s biggest commodity trading companies, and Russian investment fund United Capital Partners split another 49 per cent equity equally.


The remaining 2 per cent is held by minority shareholders after delisting of Essar Oil.

The deal has an enterprise value of close to $13 billion, which includes Essar Oil’s debt of $4.5 billion and about $2 billion debt with the port company and power plant. Also, the near $3 billion dues to Iran for past oil purchases will continue to be on Essar Oil books.

Essar Oil, part of a steel-to-ports conglomerate controlled by the billionaire Ruia brothers, operates a 405,000-barrels-a-day refinery at Vadinar in Gujarat. The refining complex also has a captive power plant as well as a port and terminal facilities.

Essar Oil said it has signed two agreements for the sale. “The first sale and purchase agreement envisages the sale of 49 per cent to Petrol Complex Pte Ltd (a subsidiary of PJSC Rosneft Oil Company).
The second envisages the sale of the remaining 49 per cent to Kesani Enterprises Company Limited (owned by a consortium led by Trafigura and United Capital Partners) at an enterprise valuation of `72,800 crore ($10.9 billion),” it said.

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