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Russian oil major Rosneft buys Essar Oil

A pact has been signed between Essar Group and Rosneft regarding the sale of Essar Oil for $12.9 billion.
BY BEx Bureau
BusinessEx
Aug 22, 2017

It is believed that this deal will help in building a good relation between both the countries Russia and India. This is the biggest acquisition deal that has ever took place between these counries.

The transaction is supposed to bring Rosneft with 49.13% holding in Essar Oil and the rest will be divided in equal parts between Trafigura and UCP Russian fund, Essars company statement stated.

The closure of the deal was announced on Monday with the amount of $12.9 billion.

This deal will help Rosneft and other investors to get hold off to 4,00,000 barrels per day in Gujarat and Essars 3,500 retail fuel stations in India.

This deal will help Essar Group in handling its debt burden situation with the cutting of its debt to about $11 billion from its total.

Prashant Ruia, forunder of Essar said, This is the single largest deleveraging ever undertaken in Indian corporate history. Also, adding overall at the group level the deal has helped bring down debt by 50%.

The Groups revenue without Essar Oil will be in excess of $15 billion including operational facilities in sectors like minerals and metals, energy, infrastructure, and services, Ruia said. He added, With this deal, we have completed our monetization program and the completion of our CapEx plan we now look forward to a period of growth in our wider portfolio of businesses. Also, the group has completed a capex plan of 1.2 trillion rupees in the last six years and now we are refocusing our energy across our new portfolio of business.

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