ALSO READRosneft, partners to invest around $12.9 billion in Essar Oil - CEO India, Russia in deal paving way for Rosneft-led group to acquire Essar Oil Rosneft-led group to buy India refiner Essar for $12-$13 bln, sources say Rosneft-led group to buy India refiner Essar for $12-$13 billion, sources say Russia's Rosneft to acquire 98% in Essar Oil for 10.9 bn
GOA, India (Reuters) - A deal in which a group led by Russian oil major Rosneft will acquire India's Essar Oil has been specially structured to avoid falling foul of Western sanctions, Andrey Kostin, head of Russian lender VTB, told Reuters on Saturday.
India's debt-laden Essar Group confirmed on Saturday it had agreed to sell a 98 percent interest in its Essar Oil unit to the consortium led by Rosneft, giving the Russian energy giant a gateway into the world's fastest-growing fuel market. VTB acted as Essar's adviser on the deal.
Speaking to Reuters in an interview on the sidelines of talks between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, Kostin said the purchase would not violate Western sanctions over Russia's role in the Ukraine crisis because Rosneft will only acquire a 49 percent stake.
Rosneft's partners Trafigura and Russian fund United Capital Partners (UCP) will acquire the remaining 49 percent. Rosneft will pay around $3.5 billion for its stake, the same amount as Trafigura and UCP.
Kostin said neither Rosneft nor Trafigura had borrowed any money to finance the purchase.
"I think UCP, which is a portfolio fund, will ... sell, maybe to firms from this region, from Asia," he said. "(Rosneft)may also sell, but it is likely to hold on. It sees an opportunity to expand in the region."
(Reporting by Denis Pinchuk; Editing by Jack Stubbs and Hugh Lawson)
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