Russia's energy giant Rosneft and its partners have completed the $12.9-billion acquisition of Essar Oil, making a grand entry into the world's most sought-after energy market with plans of grabbing a larger share of the fuel retail market in India and significantly better financial performance.
The new owners, which include Trafigura, a global commodity trading and logistics giant, and UCP Investment Group, will acquire India's largest network of private petrol pumps, the country's second-largest refinery, a 1,000-MW power plant along with the Vadinar port and oil terminal.
After the acquisition of 49.13% stake by Rosneft and another 49.13% by Trafigura and UCP Investment Group, the new owners of Essar Oil aim to scale up the company's petrol pump network to 6,000 outlets in India from 3,500 now. This will rev up fuel retailing market which already has Shell and Reliance Industries posing a challenge to the dominant state firms in the business, and BP ready to enter the arena with a licence for 3,500 pumps.
Rosneft CEO Igor Sechin said the deal was a remarkable achievement as the Russian firm had entered the “high-potential and fast-growing“ market and the new owners will make a significant difference to the company they acquired.
The acquirers plan to continue using the `Essar' brand name for the business for the time being and will take on most of the debt and working capital liabilities. Debt and liabilities worth $ 5.4 billion would be transferred to the new entity and is a part of the $12.9 billion valuation.
The deal was signed in October last year in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin at the BRICS Summit but faced delays as Essar's lenders had reservations and reported concerns of India's intelligence agencies.
The new owners, which include Trafigura, a global commodity trading and logistics giant, and UCP Investment Group, will acquire India's largest network of private petrol pumps, the country's second-largest refinery, a 1,000-MW power plant along with the Vadinar port and oil terminal.
After the acquisition of 49.13% stake by Rosneft and another 49.13% by Trafigura and UCP Investment Group, the new owners of Essar Oil aim to scale up the company's petrol pump network to 6,000 outlets in India from 3,500 now. This will rev up fuel retailing market which already has Shell and Reliance Industries posing a challenge to the dominant state firms in the business, and BP ready to enter the arena with a licence for 3,500 pumps.
Rosneft CEO Igor Sechin said the deal was a remarkable achievement as the Russian firm had entered the “high-potential and fast-growing“ market and the new owners will make a significant difference to the company they acquired.
The acquirers plan to continue using the `Essar' brand name for the business for the time being and will take on most of the debt and working capital liabilities. Debt and liabilities worth $ 5.4 billion would be transferred to the new entity and is a part of the $12.9 billion valuation.
The deal was signed in October last year in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin at the BRICS Summit but faced delays as Essar's lenders had reservations and reported concerns of India's intelligence agencies.
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