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Russian giant Rosneft is offering around $2.4 billion for a 49% stake in Essar Oil, India’s second largest refiner, as per news reports.
Rosneft, which is in the final stages of due diligence, is expected to offer just under Rs 200 per share. This values the stake sale at $2.4-2.5 billion. A formal announcement is expected only early next calendar year.
In July this year, Rosneft had signed a preliminary, non-binding agreement to buy up to 49% in Essar Oil. The world’s largest publicly traded oil company will effect a secondary purchase, buying shares from the Ruias of Essar, who are in turn making a delisting offer to the public shareholders. The Ruias currently own 73% stake.
Sebi has directed Essar Oil to match the delisting price with the offer made by Rosneft. The delisting process is independently managed by the Ruias and is not linked with Rosneft share purchase. The Ruias will control 51% once the delisting and Rosneft deal are finalised. The Ruias and Rosneft, majority owned by the Russian government, will jointly manage the company with India’s second largest single-location refinery. The contract will ensure supplies of 10 mn tonnes per annum of crude oil and feedstock to Essar’s Vadinar refinery over a period of 10 years.