Essar sale to benefit StanChart and banks

摘要

The recent sale of Essar Group's holding in Essar Oil and Vadinar port should benefit several banks holding debt of the Indian conglomerate, according to analysts. On October 15, Rosneft, Trafigura and United Capital Partners reached an agreement to acquire stakes of 98% in Essar Oil and 100% in Vadinar port for Rs850bn (US$12.7bn) in cash, making it the largest foreign acquisition in India and Russia's largest outbound transaction. Essar Group will use Rs450bn of the proceeds to repay Essar Global Holdings' debt of Rs235bn and reduce gearing at a number of its subsidiaries, including Essar Steel and Essar Power, according to analysts at Kotak Securities. Russia's VTB Capital will also refinance around Rs260bn of Essar Oil's debt as part of the acquisition.