Essar Oil completes sale of India assets to Rosneft for USD 12.9 bn

Essar Group has announced the completion of 98.26% in Essar Oil (EOL) to Rosneft and Trafigura-UCP Consortium for $12.9 billion. This transaction represents Russia's largest-ever foreign investment, as well as India's largest foreign direct investment (FDI). The deal will help the group reduce its debt by Rs 70,000 crore. EOL had announced on 15 October 2016 that Rosneft and investment consortium of Trafigura & UCP will be acquiring 98% in the company.
 
As part of the deal, Rosneft (through its subsidiary, Petrol Complex) has acquired 49.13% stake, and Trafigura-UCP consortium (through Kesani Enterprises Company) has acquired an equal stake. The remaining 1.74% stake continues to be held by retail shareholders. The deal includes EOL's 20 MTPA Vadinar Refinery, its pan-India network of over 3500 retail outlets, as well as the associated refinery infrastructure. The transaction perimeter also includes the Vadinar Port which has a capacity of 58 million tonnes and the 1010 MW Vadinar power plant that supplies both power and steam to the Vadinar refinery.
 
Following this transaction, Essar has now helped attract more than $30 billion of foreign investments into India. Previously, in 2007, Essar Group, together with Hutchison Whampoa, brought Vodafone into India in a $11.1 billion transaction.
 
"With this deal, we have completed our monetization and deleveraging programme, which is the largest undertaken by any corporate in recent years. We have substantially deleveraged our portfolio companies’ balance sheets, reducing debt by over $11 billion (Rs 70,000 crore). With the completion of our CapEx programme, we now look forward to a period of growth in our wider portfolio of businesses," Essar Capital director Prashant Ruia said.
 
"The closing of the deal is a remarkable achievement for Rosneft too: the company has entered the high-potential and fast-growing Asia-Pacific market. The acquisition of the stake in the Vadinar refinery creates unique opportunities for synergies with existing Rosneft-owned assets and will help improve an efficiency of supply to other countries within the region," Rosneft chief executive officer Igor Sechin said.