Deadline missed, Essar asks Rosneft for sale closure soon

Indian refiner Essar Oil is expected to be acquired by a consortium led by Rosneft, a Russion oil company. The deal is to be completed in upcoming few weeks.

The parties are trying to get some required approvals to complete the deal. Parties include Rosneft and commodities trader, Trafigura along with Russian private investment group United Capital Partners.

This deal was expected to be completed within the first quarter itself. Essar Oil was trying to close this deal before March 31 to save the transaction from withholding tax which is coming into effect from April 1. Because of new regulations the sale of shares from foreign entities would be taxed in India from the coming fiscal year.

With the early completion of this deal with Rosneft, Essar could be able to retire its huge debt liabilities on the books of its steel plant. Besides, the company was also on a deadline to sell its 24-26% stake for Rs 1700 crore to Farallon Capital a private equity firm so that it could help to repay its debt.

However, the timing of the deal’s completion had moved.