Rosneft Acquires Essar Oil: Largest FDI investment in India

Rosneft Acquires Essar Oil: Largest FDI investment in India : Indian Growth story ********************************************************************************** India is the world’s third-largest oil consumer, behind China and the US. India currently is the best place to invest in the world right now foreign companies are finding the Indian growth story attractive considering the slowdown in other parts of the world. some of the Indian companies struggling with debt and loan taken and could not repay it. Indian promoters may have little option but to sell profitable assets to reduce debt ************************************************************************** Rosneft :- ************************************************************************** Rosneft, the world’s largest listed oil producer by output. ************************************************************************** Trafigura:- ************************************************************************** Trafigura to being the world’s second-biggest independent oil trader, handling more than 4 million barrels a day. ************************************************************************** Introduction:- ************************************************************************** India’s oil demand is expected to rise by an average 5.9% through 2020, among the fastest in the world, according to a report last month by Goldman Sachs. To capitalize on India’s economic growth and growing Oil demand, Rosneft and its partners acquire Essar’s oil refinery in Vadinar that can process 400,000 barrels a day of crude. The refinery is located in the western Indian state of Gujarat and the deal includes a port, a power plants and 3,500 fuel stations ************************************************************************** Features:- **************************************************************************  Rosneft and its partners today took over India's second biggest private oil firm Essar Oil in an all-cash deal valued at about USD 13 billion.  Trafigura, which has close ties to Rosneft, was to finance its acquisition by taking loan from Russia’s VTB Capital, part of state-controlled bank VTB.  The transaction marks Russia’s largest outbound deal and the biggest foreign acquisition in India.  The deal involves the 20 million tonne per annum refinery in Vadinar, along with 3,500 oil retail outlets across the country, a 1,010 megawatt captive power plant and 58 million tonne port facilities.  The refinery accounts for almost 9% of India’s total oil refining output ************************************************************************** Foreign Investment In India ************************************************************************** Essar has now helped attract more than US$30 billion of foreign investments into India. In 2007, Essar Group, together with Hutchison Whampoa, brought Vodafone into India in a US$11.1 billion transaction. ************************************************************************** Benefit for Rosneft:- ************************************************************************** Snapping up the refinery would get Rosneft a strong foothold in the world’s fastest growing fossil fuel market that is India ************************************************************************** Monetary terms :- ************************************************************************** The deal has an enterprise value of close to $12.9 billion—$10.9 billion for the refinery and for the filling stations and another $2 billion for the Vadinar port. ************************************************************************** FUTURE of Rosneft:- ************************************************************************** He said the company will expand its fuel station fleet to 6,000. Rosneft also plans to double the Vadinar refining capacity and build a petrochemical facilities. **************************************************************************