More suitors later entered the fray as Essar was said to be in talks with the national oil companies of Saudi Arabia and Iran to sell a stake in its refinery business.
The deal includes acquisition of Essar Oil's (EOL) 20 million tonne Vadinar refinery in Gujarat and its retail outlets, as well as the Vadinar Port at an additional $2 billion.
The sale transaction decision was announced on October 15, 2016 when Prime Minister Narendra Modi met Russia's Vladimir Putin in BRICS Summit held in Goa.
Rosneft (through its subsidiary, Petrol Complex Pte Ltd) has acquired 49.13 percent stake, and Trafigura-UCP consortium (through Kesani Enterprises Company Limited) acquired an equal stake in Essar Oil. The remaining 1.74% stake continues to be held by retail shareholders.
It is also Russia's single-largest foreign investment made anywhere in the world. This will bring down the group's debt by over 60 per cent.More news: Padmavati's director Bhansali angry over viral photo of Ranveer-Deepika kiss
"Today is a historic day for Indo-Russian economic ties..."
"This is the single largest deleveraging ever undertaken in Indian corporate history", CEO and Managing Director of Essar Capital, Prashant Ruia told reporters. The $12-billion (Rs 78,000 crore) deal includes $4.5-billion (approximately Rs 27,000 crore) in assumed debt.
"With this deal we have completed our monetization programme.and the completion of our capex plan we now look forward to a period of growth in our wider portfolio of businesses", Ruia said. "I would like to welcome Rosneft, Trafigura and UCP as the new shareholders of EOL, and thank my colleagues, the deal team of Essar Energy and our advisors for this achievement". Together with our partners we intend to support the company to significantly improve its financial performance and, in the medium term, adopt an asset development strategy.
Rosneft first confirmed it was buying a stake in the Essar refinery in July 2015.