Deal with Rosneft is U.S. sanctions-compliant, says Essar Group CEO

Sun Oct 16, 2016 4:34pm EDT
 
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By Nidhi Verma and Promit Mukherjee

MUMBAI (Reuters) - The $12.9 billion sale of India's Essar Oil to a group led by Russia's Rosneft ROSN.MM does not run foul of U.S. sanctions imposed against the majority state-owned Russian energy firm, parent Essar Group's CEO said on Sunday.

The sale, which was signed on Saturday. It is the biggest foreign acquisition ever in India and Russia's largest outbound deal.

The deal that will give Rosneft ROSN.MM, commodities trading house Trafigura and private investment group United Capital Partners a 98 percent stake in Essar's oil arm is "US-sanctions compliant," said Essar Group's chief executive, Prashant Ruia.

He said the deal did not violate the economic sanctions imposed by the U.S. government on Russian entities over Russia's role in the Ukraine crisis. "The way it is structured, it is fully compliant. We are well within the rules that govern Russian companies."

Essar, controlled by the billionaire Ruia brothers, has interests in oil and gas, steel, ports and power, and has been under pressure from its lenders to reduce debts.

"It was an emotional decision, it was a very tough decision. It was difficult decision for people involved in the company and those who were involved in the business and building it," said Ruia in an interview with Reuters on Sunday.

"We felt all in all, we were getting attractive valuations and we decided to sell."

  Continued...

 
Chief Executive of the Essar group Prashant Ruia speaks with the media during the Global CEO Conclave at the Vibrant Gujarat Summit in Gandhinagar in the western Indian state of Gujarat January 11, 2015. REUTERS/Amit Dave