Essar Oil in talks to sell 49 per cent stake to Russia's Rosneft
DSIJ Intelligence / 16 Jun 2015
Essar Oil is in talks to sell 49 per cent stake to leading Russian oil producer Rosneft. Earlier in december it had an agreement with Rosneft to import 200000 barrels per day over ten years. Essar Oil's market value is Rs 21163 crore. The deal may take place for Rs 10500 crore.
Essar Oil has a refinery with 20 million tonnes annual capacity at Vadinar in Gujarat. The company also has Stanlow refinery in England with capacity of 296000 barrels per day. It has five coal-bed methane (CBM), holding up to 10 trillion cubic feet of gas resource. Essar Oil runs around 1400 oil retail outlets across India as of FY14. The Company's revenue declined by 15.61 per cent to Rs 82983 crore in FY15 because crude oil prices fell by 50 per cent during the year.
Essar Oil is in talks to sell 49 per cent stake to leading Russian oil producer Rosneft. Earlier in december it had an agreement with Rosneft to import 200000 barrels per day over ten years. Essar Oil's market value is Rs 21163 crore. The deal may take place for Rs 10500 crore. According to Securities and Exchanges Board of India, the deal will lead to an open offer for minority shareholders. The promoter along with Essar Energy own 90 per cent stake in Essar Oil. After deal it will be minority shareholder.
Essar Oil imports huge amount of oil from Iran and around 25 per cent from Persian Gulf nation for Vadinar refinery. The company will reduce imports of crude oil from Iran to adjust Russian supply. It wants to hedge their risk on crude oil prices and stable supplier of crude oil. Essar Oil has not imported crude from Russia till date. The company will be able to cut down cost through this deal.
Rosneft's crude oil capacity is 104 million tonnes per annum. Rosneft reported revenue of Rs 64809 crore in year 2014 with a growth of 17.2 per cent on yearly basis. Russia's Rosneft has more than USD 20 billion cash and line of credit up to USD 6 billion in the year 2014 shows strong liquidity. Rosneft is majority owned by the Russian government with British Petroleum holding under a 20 per cent stake and public shareholders around 10 per cent.
Essar oil will get wide geographic supplier for crude oil. The new Russian Rosneft will provide reliable supply. The company's share price surged by 41.5 per cent to Rs 146.45 over the span of week.
If you want to stay updated with the share market news today, keep a close watch on the indian stock market today with real time movements like sensex today live and overall stock market today trends. Investors tracking ipo allotment status, ipo news today, or the latest ipo india can also follow daily updates along with bse share price live data. Whether you are learning how to invest in stock market in india, preparing for a market crash today, or searching for the best stocks to buy in india, insights on top gainers today india, top losers today india, trending stocks india and long term stocks india help in making informed investment decisions.