Lenders give nod to ₹86,000crore sale of Essar Oil to Rosneft
LAST LEG Essar aiming to close the deal early next month
The Essar group has crossed the last hurdle to complete the sale of its Gujarat refinery to Russia’s Rosneft, with the lenders, including LIC, giving the go-ahead to the deal, sources said.
With this ₹86,000-crore transaction, which makes it the largest FDI inflow for the country, the company hopes to close the deal by early next month, Essar group sources said.
Asked if the 23 creditors also include LIC, to which the company owes around ₹1,200 crore, an official replied in the affirmative.
It can be noted that LIC’s refusal to give the clearance was one of the biggest stumbling blocks.
The deal was signed on October 15 last year in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin in Goa on the sidelines of the BRICS summit.
The sale involves the Ruias almost exiting its cash cow in favour of Russian giant Rosneft and a consortium led by Trafigura-UCP.
“The joint lenders forum of 23 lenders, led by SBI and ICICI, met here this morning and approved and authorised the release of shares of Essar Oil to facilitate the stake sale to Rosneft and the investment consortium headed by Trafigura and UCP,” the company source told PTI.
It can be noted that Igor Sechin, the chief executive of Rosneft, had told the company at its AGM on Thursday that the transaction could be “considered as closed”.
Essar Oil operates a 20 million tonne refinery at Vadinar in Gujarat, and the deal also involves transferring its over 3,500 oil retail outlets.
The refinery accounts for almost 9% of the country’s total refining output.
The plant also has a 1,010MW captive power plant, and a 58-million tonne deep draft port that helps in importing crude and exporting finished products for the refinery.
Bhushan Power & Steel on Friday became the sixth amongst the 12 largest indebted companies named by the RBI to face liquidation proceedings, as lenders led by PNB decided to refer it to the NCLT.
The proceedings will be carried out against the firm under the Insolvency and Bankruptcy Code (IBC). Its parent company, Bhushan Steel, was referred to the tribunal for liquidation yesterday by the lenders led by SBI.
The Delhi-based Bhushan Power & Steel, which owes ₹37,248 crore to a consortium of lenders led by Punjab National Bank, is the sixth out of the 12 large stressed accounts identified by RBI for referral to the National Company Law Tribunal (NCLT).
“Banks at a meeting today decided to refer the case to NCLT for recovery,” said a banker.
While Bhushan Steel is in default of ₹44,478 crore to banks, Essar Steel owes ₹37,284 crore and Electrosteel Steels ₹10,273.6 crore.
On Saturday, Lanco Infratech, in default of ₹44,364.6 crore, said the RBI had directed its lead banker IDBI Bank to initiate insolvency procedure.
The internal advisory committee of the RBI after its meeting on June 13 had recommended 12 accounts constituting about 25% of the gross NPAs of the banking system for immediate reference under IBC.