Rosneft, the Russian oil major, has completed the much-delayed takeover of Essar Oil worth $13 billion. Igor Sechin, Chief Executive Officer, Rosneft, informed shareholders’ of this development in an Annual General Meeting, according to a Reuters report. The company’s AGM was held in Sochi on Thursday.
“Please be informed that the legal decision was received yesterday, which guarantees the entry of the company in Essar Oil’s capital”, Igor Sechin said according to the report. The deal will allow Rosneft to increase its oil refining output by 20 per cent this year, Sechin added.
The deal will give Rosneft control over Essar Oil’s network of 2,700 petrol pumps and a deepwater port on the West coast of India, as the Russian Oil major will hold a controlling stake of 49 percent in Essar Oil.
The takeover was agreed to in October 2016 but was delayed as several banks had raised objections to the deal, due to Essar Oil owing them Rs 1.30 lakh crores.
Earlier this month, in an attempt to save this deal from falling off the rails, Essar Oil had agreed to prepay up to 20% to all its lenders. The company offered to make an immediate payment of Rs 800.00 crore to LIC (Life Insurance Corporation of India), one of its lenders.
LIC had not agreed to the $13-billion deal and had said that it would approve the takeover only after Essar Power, another Essar company, pays its dues to LIC.
A day prior to this offer by Essar Oil, Arundhati Bhattacharya, SBI Chairman, had said in an overseas event that she expected the deal to be closed within the month of June, adding that she had already given her approval for the takeover.
“There is a very real possibility this deal will close shortly and we expect to see this happening very soon,” Bhattacharya had said.