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Rosneft Buying India Refiner for $13b

Rosneft Buying India Refiner for $13bRosneft Buying India Refiner for $13b

A group led by Russian oil major Rosneft will acquire India's Essar Oil in a $12-$13 billion deal including debt, two sources privy to the deal said, strengthening the ties between the world's largest oil producer and the world's fastest growing fuel consumer.

The deal helps Russia to deepen economic ties that stretch back to the Soviet era. The purchase is the biggest foreign acquisition ever in India and Russia's largest outbound deal, according to Thomson Reuters data.

Rosneft will get a 49% stake in Essar and the two investors -- European trader Trafigura and a Russian fund UCP -- will hold another 49% in equal parts, the sources said, adding that the valuation included about $4.5 billion in assumed debt.

Through this acquisition, Rosneft will not only get an additional outlet for its oil amid a global supply glut but will also get to market fuels in the world's fastest-growing major economy.

Essar Oil is part of a steel-to-ports conglomerate controlled by the billionaire Ruia brothers that has faced pressure from creditors to reduce borrowing that some analysts estimate at more than $14 billion.

Essar Oil operates a 400,000 barrel-per-day oil refinery in Vadinar on India's west coast and sells fuels through its 2,470 filling stations in India.

The deal will also include the Vadinar port and a power plant associated with the refinery, said one of the sources.

 

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