Essar looking to expand in Nigeria

India’s Essar Group, controlled by billionaires Shashi and Ravi Ruia, is looking at opportunities to expand in Nigeria, as its London-listed energy unit seeks to tap lower-cost funding abroad for international acquisitions.

The group, which owns steel, mining, power, and oil and gas businesses, is considering “growth and investment opportunities,” it said in an e-mailed statement today. “We are looking at business opportunities in Nigeria.”

“The sectors or the investment plans have not yet been finalised,” it said. Essar Group is planning an investment of at least $2 billion in Nigerian power plants, The Financial Times reported, citing people it didn’t identify.

Essar Energy Plc in April raised 1.27 billion pounds ($2 billion) in its initial public offering in London to help expand the group’s refining, energy exploration and power businesses, which include an offshore oil block in Nigeria and a 50 per cent- stake in Kenya Petroleum Refinery, according to its website.

“We want to tap these international fund raising opportunities on the debt side,” made possible by the overseas listing, Essar Energy Chief Financial Officer P Sampath said in an interview on October 7. The company may issue its first foreign currency bond next year, he said.

Essar Energy is considering international acquisitions in three areas: coal mines to secure fuel for its Indian power plant expansion, overseas oil refineries, and overseas fuel-marketing assets, Sampath said.

Essar Energy plans to reduce its stake in its Nigeria block to 63 per cent from 100 per cent by selling to a local partner, the company said in June. That sale is close to being completed, he said.