The Ruias are planning to sell up to a 74% stake in Essar Oil in a multi-stage transaction, as they seek to reduce the debt burden of the group. In addition to the 49% stake that they are in discussions to sell to Russian oil major Rosneft, the Ruias plan to offload an additional 25% to international trading companies and other financial investors, people familiar with the developments said. That will leave Ruias with a 26% stake in the company that owns and perates an oil refinery with an annual capacity of 20 million tonnes in Gujarat and is currently the only cash generating business of the group. The Vadinar port and oil terminal — part of the group’s port business but is largely captive to Essar Oil — will also get divested as part of the sale, said the people ET spoke to. By reducing the stake to below 50%, the Rs 30,000-crore debt of Essar Oil, as well as an additional Rs 5,000-crore borrowing of the Vadinar port, will be taken off the books of the group and the proceeds raised from the sale of equity will be used to retire debt at the promoter level.
Source: Economic TimesRosneft may buy 49% of Essar Oil; talks on with trading cos to sell 25% more.
Industry: Oil and Gas 2016-03-21
