Lenders give green signal for Rs 86,000 crore Essar Oil sale to Rosneft

Mumbai-based Indian conglomerate group, Essar group dodged its last obstacle to complete the sale of the group's Gujarat refinery to Russia's integrated oil major, Rosneft. The group's lenders including the LIC, gave a green signal to the deal, according to the market reports.

The deal between the Indian conglomerate and Russia's Rosneft will make it the largest FDI inflow deal with a transaction amount of Rs 86,000 crore. The deal is likely to take place in the first week of July, as corresponding reports suggested.

The group has a total of 23 lenders, of which the Essar group owes nearly Rs 1,200 crore to LIC, thus making LIC's approval was very crucial for the deal. While the joint lender forum (JLF) comprising of 23 lenders that granted approval and authorised the release of shares of Essar Oil to enable the stake sale to Rosneft, is headed by SBI and ICICI Bank.

A 20 million tonne refinery is operated by Essar Oil at Vadinar in Gujarat, while the deal also includes the transfer of over 3,500 of its oil retail outlets. The Gujarat refinery that is up for sales accounts for nearly 9 percent of India's total refining output.

The sale will consequently result in the near exit of Ruias from Essar Oil in favour of Russian oil major Rosneft and the consortium headed by Trafigura-UCP.

The deal was signed on October 15, 2016, in Goa, amidst the BRICS summit, in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin.