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Rosneft-led group to buy India refiner Essar for $12-$13 billion, sources say

Reuters  |  NEW DELHI/SINGAPORE 

By Nidhi Verma and Jessica Jaganathan

NEW DELHI/(Reuters) - A group led by Russian major will acquire India's in a $12 to $13 billion deal including debt, two sources privy to the deal said, strengthening the ties between the world's largest 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 and Russia's largest outbound deal, according to Thomson Reuters data.

It also comes as Russia is keen to reassert its role in global affairs and at a time when its own economy is stagnant, hit by Western sanctions and low prices.

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

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

No immediate comment was available from the companies involved.

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.

operates a 400,000 barrel-per-day 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.

"This could herald a diversification in crude sourcing for overall away from the Middle East," said Tushar Tarun Bansal, director at Singapore-based consultancy Ivy Global. "From India's point of view, it cements a strong relationship with Russia."

One source said the deal will be largely funded by Russia's VTB Capital, part of state-controlled bank VTB. VTB Group is under Western sanctions over Russia's role in the Ukraine crisis that restrict its access to international capital. Trafigura will also bring in some funds to buy its share, said a third source.

is expected to announce the deal on Saturday in the coastal resort of Goa during a visit by President Vladimir Putin, who will meet Indian Prime Minister Narendra Modi for a bilateral summit.

In a sign it plans to expand its presence in India, Trafigura has hired two traders from Reliance Industries and Oil, and a business development executive from to form a new desk based in Mumbai, adding to its current Indian staff count of more than 250, two sources familiar with the matter said.

The two traders have a combined experience of more than 20 years with the Indian refiners, the sources added.

Trafigura has also advertised for an operations analyst based in Mumbai to provide physical products operations and trader support, according to a notice on Trafigura's website.

and Trafigura are the latest international companies after Royal Dutch Shell and BP to enter the Indian fuel retailing market.

may supply Venezuelan to Essar's Vadinar refinery after a deal to buy a stake in the Indian company is finalised, the Indian company's managing director L. K. Gupta told Reuters in August.

(Reporting by Nidhi Verma and Jessica Jaganathan; Editing by Douglas Busvine, Keith Weir, Alexandra Hudson and Christian Schmollinger)

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

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Rosneft-led group to buy India refiner Essar for $12-$13 billion, sources say

NEW DELHI/SINGAPORE (Reuters) - A group led by Russian oil major Rosneft will acquire India's Essar Oil in a $12 to $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.

By Nidhi Verma and Jessica Jaganathan

NEW DELHI/(Reuters) - A group led by Russian major will acquire India's in a $12 to $13 billion deal including debt, two sources privy to the deal said, strengthening the ties between the world's largest 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 and Russia's largest outbound deal, according to Thomson Reuters data.

It also comes as Russia is keen to reassert its role in global affairs and at a time when its own economy is stagnant, hit by Western sanctions and low prices.

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

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

No immediate comment was available from the companies involved.

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.

operates a 400,000 barrel-per-day 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.

"This could herald a diversification in crude sourcing for overall away from the Middle East," said Tushar Tarun Bansal, director at Singapore-based consultancy Ivy Global. "From India's point of view, it cements a strong relationship with Russia."

One source said the deal will be largely funded by Russia's VTB Capital, part of state-controlled bank VTB. VTB Group is under Western sanctions over Russia's role in the Ukraine crisis that restrict its access to international capital. Trafigura will also bring in some funds to buy its share, said a third source.

is expected to announce the deal on Saturday in the coastal resort of Goa during a visit by President Vladimir Putin, who will meet Indian Prime Minister Narendra Modi for a bilateral summit.

In a sign it plans to expand its presence in India, Trafigura has hired two traders from Reliance Industries and Oil, and a business development executive from to form a new desk based in Mumbai, adding to its current Indian staff count of more than 250, two sources familiar with the matter said.

The two traders have a combined experience of more than 20 years with the Indian refiners, the sources added.

Trafigura has also advertised for an operations analyst based in Mumbai to provide physical products operations and trader support, according to a notice on Trafigura's website.

and Trafigura are the latest international companies after Royal Dutch Shell and BP to enter the Indian fuel retailing market.

may supply Venezuelan to Essar's Vadinar refinery after a deal to buy a stake in the Indian company is finalised, the Indian company's managing director L. K. Gupta told Reuters in August.

(Reporting by Nidhi Verma and Jessica Jaganathan; Editing by Douglas Busvine, Keith Weir, Alexandra Hudson and Christian Schmollinger)

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

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Business Standard
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Rosneft-led group to buy India refiner Essar for $12-$13 billion, sources say

By Nidhi Verma and Jessica Jaganathan

NEW DELHI/(Reuters) - A group led by Russian major will acquire India's in a $12 to $13 billion deal including debt, two sources privy to the deal said, strengthening the ties between the world's largest 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 and Russia's largest outbound deal, according to Thomson Reuters data.

It also comes as Russia is keen to reassert its role in global affairs and at a time when its own economy is stagnant, hit by Western sanctions and low prices.

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

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

No immediate comment was available from the companies involved.

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.

operates a 400,000 barrel-per-day 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.

"This could herald a diversification in crude sourcing for overall away from the Middle East," said Tushar Tarun Bansal, director at Singapore-based consultancy Ivy Global. "From India's point of view, it cements a strong relationship with Russia."

One source said the deal will be largely funded by Russia's VTB Capital, part of state-controlled bank VTB. VTB Group is under Western sanctions over Russia's role in the Ukraine crisis that restrict its access to international capital. Trafigura will also bring in some funds to buy its share, said a third source.

is expected to announce the deal on Saturday in the coastal resort of Goa during a visit by President Vladimir Putin, who will meet Indian Prime Minister Narendra Modi for a bilateral summit.

In a sign it plans to expand its presence in India, Trafigura has hired two traders from Reliance Industries and Oil, and a business development executive from to form a new desk based in Mumbai, adding to its current Indian staff count of more than 250, two sources familiar with the matter said.

The two traders have a combined experience of more than 20 years with the Indian refiners, the sources added.

Trafigura has also advertised for an operations analyst based in Mumbai to provide physical products operations and trader support, according to a notice on Trafigura's website.

and Trafigura are the latest international companies after Royal Dutch Shell and BP to enter the Indian fuel retailing market.

may supply Venezuelan to Essar's Vadinar refinery after a deal to buy a stake in the Indian company is finalised, the Indian company's managing director L. K. Gupta told Reuters in August.

(Reporting by Nidhi Verma and Jessica Jaganathan; Editing by Douglas Busvine, Keith Weir, Alexandra Hudson and Christian Schmollinger)

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

image
Business Standard
177 22

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