Essar-Rosneft deal: Acquisition expected to be completed by June-end

Russian oil firm would have a 49% stake in Essar to pursue its global expansion plans

Russia's largest oil producer Rosneft expects to complete the acquisition of Indian refiner Essar Oil by the end of June, Rosneft's chief financial officer Pavel Fedorov said on Wednesday.

The $12.9 billion deal, the largest acquisition of an Indian company by a foreign firm, will give Rosneft a 49 per cent stake in Essar to pursue its global expansion plans. The deal was initially expected to close by the end of March.

"As you know, it is currently planned to complete the deal on Essar assets acquisition by the end of this quarter," Fedorov said during a conference call.

The deal has been delayed because some Indian lenders to Essar have yet to give their approval.

 

Another 49 per cent share will be split between commodities trader Trafigura and Russian investor United Capital Partners (UCP). The billionaire Ruia brothers will retain a 2 per cent stake.

Russia has increased Urals oil supplies to India, taking market share from members of the Organization of Petroleum Exporting Countries. Russia has joined an OPEC-led pact to curb global supplies in a bid to lift crude prices.

Russian oil flows to India are expected to rise further once the Rosneft the deal to buy Essar plant is completed.