The Essar group has crossed the last hurdle to complete the sale of its Gujarat refinery to Russia’s Rosneft, with the lenders, including LIC, giving the go-ahead to the deal, sources said. With this Rs 86,000-crore transaction, which makes it the largest FDI inflow for the country, the company hopes to close the deal by early next month, Essar group sources said. Asked if the 23 creditors also include LIC, to which the company owes around Rs 1,200 crore, an official replied in the affirmative. It can be noted that LIC’s refusal to give the clearance was one of the biggest stumbling blocks. The deal was signed on October 15 last year in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin in Goa on the sidelines of the BRICS summit. The sale involves the Ruias almost exiting its cash cow in favour of Russian giant Rosneft and a consortium led by Trafigura-UCP.
“The joint lenders forum of 23 lenders, led by SBI and ICICI, met here this morning and approved and authorised the release of shares of Essar Oil to facilitate the stake sale to Rosneft and the investment consortium headed by Trafigura and UCP,” the company source told PTI. It can be noted that Igor Sechin, the chief executive of Rosneft, had told the company at its AGM yesterday that the transaction could be “considered as closed”.
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Essar Oil operates a 20 million tonne refinery at Vadinar in Gujarat, and the deal also involves transferring its over 3,500 oil retail outlets. The refinery accounts for almost 9 per cent of the country’s total refining output. The plant also has a 1,010-mw captive power plant, and a 58-million tonne deep draft port that helps in importing crude and exporting finished products for the refinery.