Essar may raise $3.5 billion by stake sale in restructured refinery business

There is a large transaction brewing at the Essar House, sources suggest that Ruia-owned Essar Group is looking at raising over $3.5 bn by selling stake in the refinery business. Essar Group is said to be in talks with two Chinese oil & gas majors for the deal. UK based Stanlow Refinery which is Essar Group’s prized asset will be monetised in the transaction, a source said.

The deal could be in several phases and will require restructuring of Essar Group’s energy business. First step is already underway with both U.K- listed Essar Energy and India-based Essar Oil heading for a de-listing. Essar Energy is expected to sell its Stanlow Refinery to Essar Oil for $1 bn, post the de-listing process is complete.

The restructured Essar Oil with Stanlow Refinery unit under it is expected to sell 49% stake in the company to the interested buyer. Company is expecting an Enterprise Value of $7.5 bn. “Valuations will depend on the negotiations with the buyers” an industry expert said.

When ET Now contacted Essar Group for comments, the spokesperson of the company in an e-mail response said, “We categorically deny this information which is far from truth.