Almost a year after the Ruia brothers confirmed the sale of their flagship Vadinar oil refinery to Russian buyers, Essar Oil will announce the closure of the deal on Monday.
Essar Oil, the second largest private oil refiner and marketer in the country, is selling 98 per cent of the company to Russia’s Rosneft Oil Company and a consortium of traders led by Trafigura and United Capital Partners.
The all-cash deal assigns an enterprise value (a total of equity and debt minus cash) of ₹72,800 crore for Essar Oil’s refining and fuel retail assets.
An additional ₹13,300 crore will be paid for for the adjacent Vadinar port and related infrastructure. Essar Oil operates India’s second largest refinery at Vadinar, Gujarat, with a capacity of 20 million tonnes per annum, a 1,010 MW captive power plant and a network of 2,700 operating fuel retail outlets.
According to the two definitive agreements that have been signed, Essar Energy Holdings and Oil Bico (Mauritius) — the controlling shareholders of Essar Oil Ltd — will sell 49 per cent stake to to Petrol Complex Pte Ltd (a subsidiary of the Russian Rosneft Oil Company) and another 49 per cent to Kesani Enterprises Company Ltd, a consortium of Trafigura, the world’s largest commodity trader, and private equity group United Capital Partners.
In this consortium, Essar will hold 2 per cent of stake.