Essar Group is exploring the sale of its 405,000 barrel-per-day oil refinery in Gujarat, as the conglomerate seeks funds to reduce its debt, two sources familiar with the matter said.
Essar, which is controlled by the billionaire Ruia brothers and has assets in the oil & gas, steel, ports and power sectors, has faced pressure from creditors to reduce borrowing that some analysts estimate at more than $14 billion. Prime Minister Modi has made a priority of cleaning up the balance sheets of India´s banks which carry more than $120 billion in troubled loans. Much of that money is owed by big business to state-run banks.
Essar has also signed a preliminary deal with Russian state oil major Rosneft last month to sell a 49 per cent stake in the refinery at Vadinar, Gujarat.