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Deal with Rosneft is U.S. sanctions-compliant, says Essar Group CEO

Reuters  |  MUMBAI 

By Nidhi Verma and Promit Mukherjee

(Reuters) - The $12.9 billion sale of India's to group led by Russia's does not run foul of U.S. sanctions imposed against the majority state-owned Russian energy firm, parent Group's CEO said on Sunday.

The sale, which was signed on Saturday. It is the biggest foreign acquisition ever in and Russia's largest outbound deal.

The deal that will give Rosneft, commodities trading house Trafigura and private investment group United Capital Partners 98 percent stake in Essar's arm is "US-sanctions compliant," said Group's chief executive, Prashant Ruia.

He said the deal did not violate the economic sanctions imposed by the U.S. government on Russian entities over Russia's role in the Ukraine crisis. "The way it is structured, it is fully compliant. We are well within the rules that govern Russian companies."

Essar, controlled by the billionaire Ruia brothers, has interests in and gas, steel, ports and power, and has been under pressure from its lenders to reduce debts.

"It was an emotional decision, it was very tough decision. It was difficult decision for people involved in the company and those who were involved in the business and building it," said Ruia in an interview with Reuters on Sunday.

"We felt all in all, we were getting attractive valuations and we decided to sell."

DEBT REDUCTION

plans to use proceeds from the sale to offset some 50 percent of the debt on its group companies after the deal is completed.

Ruia said the parent company's debt would be cut by some $5 billion and further $5 billion would go towards trimming debt at the operating company level.

Some of the proceeds from the transaction will be pumped into existing businesses, said Ruia, adding that the group does not have any plans to sell any of its other businesses in the future or any plans to de-list them to gain more control.

Debt-laden Steel, which owns 10 million tonne steel plant in the western state Gujarat, carries debt of over $5 billion and had been seeking to restructure its debt.

Ruia said is working closely with the banks to work out restructuring plan and some of the funds raised via the sale of would go into restructuring the operations of Steel.

(Reporting by Nidhi Verma and Promit Mukherjee; Editing by Euan Rocha, Greg Mahlich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Deal with Rosneft is U.S. sanctions-compliant, says Essar Group CEO

MUMBAI (Reuters) - The $12.9 billion sale of India's Essar Oil to a group led by Russia's Rosneft does not run foul of U.S. sanctions imposed against the majority state-owned Russian energy firm, parent Essar Group's CEO said on Sunday.

By Nidhi Verma and Promit Mukherjee

(Reuters) - The $12.9 billion sale of India's to group led by Russia's does not run foul of U.S. sanctions imposed against the majority state-owned Russian energy firm, parent Group's CEO said on Sunday.

The sale, which was signed on Saturday. It is the biggest foreign acquisition ever in and Russia's largest outbound deal.

The deal that will give Rosneft, commodities trading house Trafigura and private investment group United Capital Partners 98 percent stake in Essar's arm is "US-sanctions compliant," said Group's chief executive, Prashant Ruia.

He said the deal did not violate the economic sanctions imposed by the U.S. government on Russian entities over Russia's role in the Ukraine crisis. "The way it is structured, it is fully compliant. We are well within the rules that govern Russian companies."

Essar, controlled by the billionaire Ruia brothers, has interests in and gas, steel, ports and power, and has been under pressure from its lenders to reduce debts.

"It was an emotional decision, it was very tough decision. It was difficult decision for people involved in the company and those who were involved in the business and building it," said Ruia in an interview with Reuters on Sunday.

"We felt all in all, we were getting attractive valuations and we decided to sell."

DEBT REDUCTION

plans to use proceeds from the sale to offset some 50 percent of the debt on its group companies after the deal is completed.

Ruia said the parent company's debt would be cut by some $5 billion and further $5 billion would go towards trimming debt at the operating company level.

Some of the proceeds from the transaction will be pumped into existing businesses, said Ruia, adding that the group does not have any plans to sell any of its other businesses in the future or any plans to de-list them to gain more control.

Debt-laden Steel, which owns 10 million tonne steel plant in the western state Gujarat, carries debt of over $5 billion and had been seeking to restructure its debt.

Ruia said is working closely with the banks to work out restructuring plan and some of the funds raised via the sale of would go into restructuring the operations of Steel.

(Reporting by Nidhi Verma and Promit Mukherjee; Editing by Euan Rocha, Greg Mahlich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Deal with Rosneft is U.S. sanctions-compliant, says Essar Group CEO

By Nidhi Verma and Promit Mukherjee

(Reuters) - The $12.9 billion sale of India's to group led by Russia's does not run foul of U.S. sanctions imposed against the majority state-owned Russian energy firm, parent Group's CEO said on Sunday.

The sale, which was signed on Saturday. It is the biggest foreign acquisition ever in and Russia's largest outbound deal.

The deal that will give Rosneft, commodities trading house Trafigura and private investment group United Capital Partners 98 percent stake in Essar's arm is "US-sanctions compliant," said Group's chief executive, Prashant Ruia.

He said the deal did not violate the economic sanctions imposed by the U.S. government on Russian entities over Russia's role in the Ukraine crisis. "The way it is structured, it is fully compliant. We are well within the rules that govern Russian companies."

Essar, controlled by the billionaire Ruia brothers, has interests in and gas, steel, ports and power, and has been under pressure from its lenders to reduce debts.

"It was an emotional decision, it was very tough decision. It was difficult decision for people involved in the company and those who were involved in the business and building it," said Ruia in an interview with Reuters on Sunday.

"We felt all in all, we were getting attractive valuations and we decided to sell."

DEBT REDUCTION

plans to use proceeds from the sale to offset some 50 percent of the debt on its group companies after the deal is completed.

Ruia said the parent company's debt would be cut by some $5 billion and further $5 billion would go towards trimming debt at the operating company level.

Some of the proceeds from the transaction will be pumped into existing businesses, said Ruia, adding that the group does not have any plans to sell any of its other businesses in the future or any plans to de-list them to gain more control.

Debt-laden Steel, which owns 10 million tonne steel plant in the western state Gujarat, carries debt of over $5 billion and had been seeking to restructure its debt.

Ruia said is working closely with the banks to work out restructuring plan and some of the funds raised via the sale of would go into restructuring the operations of Steel.

(Reporting by Nidhi Verma and Promit Mukherjee; Editing by Euan Rocha, Greg Mahlich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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177 22

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