Russian government controlled oil company Rosneft took over India’s second biggest private oil firm Essar Oil in an all-cash deal valued at about $13 billion.
The deal was announced as Indian Prime Minister Narendra Modi met Russian President Vladimir Putin during a meeting of the leaders of the BRICS countries.
Rosneft bought a 49 per cent stake in Essar Oil’s refinery port and petrol pumps, while Netherlands-based Trafigura Group Pte and Russian investment fund United Capital Partners split another 49 per cent equity equally.
The remaining 2 per cent is held by minority shareholders after delisting of Essar Oil.
The deal has an enterprise value of close to $13 billion, which includes Essar Oil’s debt of $4.5 billion and about $2 billion debt with the port company and power plant.
Also, the near $3 billion dues to Iran for past oil purchases will continue to be on Essar Oil books.
Essar Oil, part of a steel-to-ports conglomerate controlled by the billionaire Ruia brothers, operates a 405,000-barrels-a-day refinery at Vadinar in Gujarat. The refining complex also has a captive power plant as well as a port and terminal facilities.