Essar Oil announced the completion of sale of its India assets to the Russian government controlled Rosneft-led consortium for $12.9 billion.
The deal comes more than 10 months after it was announced on October 15 last year on the sidelines of the BRICS summit in Goa. The transaction got delayed after the lenders wanted their debt worth over Rs 45,000 crore to be cleared.
According to Essar Energy, the deal includes sale of its 20 million tonne refinery at Vadinar in Gujarat, a captive power plant and captive port as well as over 3,500 petrol pumps.
Russia’s largest oil producer Rosneft said it had successfully closed a deal to buy a 49 per cent stake in Essar Oil Ltd.
An investment consortium comprising Trafigura and UCP has also announced the closure of their acquisition of a separate 49 per cent share of Essar Oil.
“Together with our partners we intend to support the company to significantly improve its financial performance and, in the medium term, adopt an asset development strategy,” Rosneft cited its CEO Igor Sechin as saying in a statement.
The Essar Oil-Rosneft deal is the largest foreign direct investment (FDI) into the country till date and also the largest outbound investment from Russia.
The company director, Prashant Ruia, said the firm will pay back as much as Rs 70,000 crore to lenders, including SBI, ICICI Bank, Axis Bank, IDBI Bank and StanChart. This will bring down the group’s debt by over 60 per cent.