The $12.9 billion Rosneft-Essar deal recently came close to getting derailed, BW Businessworld has reliably learnt. Sources say that so exasperated was the Russian oil company with Essar and the slow movement of the deal -- as some Indian lenders to Essar have still not given their go-ahead to the deal – that they wanted to call it off.
The buyers were reported to be exasperated because they were dealing with no less than 28 Indian banks. The approvals from Indian banks has been taking a lot of time. Even LIC, one of the creditors, is reported to have demanded dues from Esaar before its go-ahead.
According to the original plan, Rosneft was to take a 49 per cent stake in Essar. According to the original plan, both sides were supposed to close the deal by Match 31.
A Reuters report, however, said that Russia’s second-biggest bank VTB, involved in financing the deal, has said that 19 more days would be needed to settle all the payments.
“The closure of the deal is delayed by a few weeks due to the pending approvals from the Indian banks. Both parties are still committed to close this deal as soon as the few remaining approvals from the banks are obtained,” the bank said in emailed comments to Reuters.
The deal, the largest foreign acquisition of an Indian company, would give Rosneft a foothold in the growing Indian market. It already operates in a number of regions, including Europe and Latin America.
A 49 percent share will be split between commodities trader Trafigura and Russian investor United Capital Partners (UCP).
The billionaire Ruia brothers would retain a 2 per cent stake.
Essar Oil operates a 400,000 barrel-a-day refinery in Vadinar on India's west coast and sells fuels through its 2,470 filling stations across the country.
