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Essar Group firm Essar Energy Plc today signed an agreement with China Development Bank and PetroChina International Co for $1 billion loan, sources said.
“Essar Energy today evening signed an MoU with the China Development Bank and PetroChina International Co for $1 billion loan,” a person in the know of the development said.
The deal was signed during the Indo-China business leaders meeting held here this evening prior to the business meeting which Chinese premier Li Keqiang attended, the sources said.
Essar spokesperson, however, did not respond to queries to confirm the development.
According to the sources, the loan agreement with the China Development Bank will be backed by the supply of refined products from Essar Oil’s Vadinar refinery in Gujarat. This will be a kind of export advance which the company will use to cut its debt.
“As part of our initiative to dollarize our debt, we have been in discussion with several international banks, including Chinese banks. The CDB loan is part of that conversation,” Essar Oil had said in a statement to the exchanges yesterday.
Accordingly, PetroChina would buy fuel from Essar for seven to 10 years.
Shares of Essar Oil closed at Rs 81.10 apiece, down 0.5 per cent, on the BSE today.
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