Ending ties with Russia's Rosneft, Trafigura sells Nayara stake to Hara Capital Sarl

Swiss-headquartered commodity trader Trafigura sold its 24.5% interest in Nayara Energy Ltd, formerly Essar Oil, to Hara Capital Sarl, severing ties with Russian energy giant Rosneft. Nayara runs India’s second-largest private refinery and more than 6,000 petrol pumps. Trafigura said it had completed the sale of its “indirect minority interest” in Nayara to the Italian investment firm on Wednesday. Rosneft is Nayara’s single largest shareholder with a 49.13% stake.

The deal size was not disclosed in the official statement. People involved in the transaction said Hara, a wholly owned subsidiary of Italian energy investment company, Mareterra Group Holding, paid $165.9 million or the book value of the stake, based on disclosures in Trafigura’s last annual report.

Trafigura had classified the investment as “held for sale,” with a possible disposal to Mareterra, then known as Genera.

A 25% stake would have been valued at $3.25 billion based on 2016 numbers. Most industry observers feel this is a distress sale. Nayara was bought by a Rosneft-led consortium in 2016, two years after Russia and Rosneft had first faced west-imposed sanctions for the annexation of Crimea, for $12.9 billion. Trafigura’s decision to join a Russia-led group cemented its position in Moscow and with Rosneft, the latter’s petroleum trading aspirations having been hindered by western sanctions. Trafigura’s rivals Vitol and Glencore had long fought for access to Rosneft crude and even provided short-term trade financing to one of the world’s largest crude producers, since this was allowed under sanctions introduced after Crimea’s annexation.

Nayara operates the 400,000 barrels per day Vadinar refinery in Gujarat state and is also building a 450,000 tonne-a-year polypropylene plant, marking the first phase of its expansion into petrochemicals.

Headquartered in Rome, Mareterra is active in Italy, Luxembourg, France and Spain. It has a focus on energy and carbon efficiency infrastructure and is expanding to regions outside Europe. Over the past two years, Mareterra has installed pumps as well as charging systems for electric cars in Italy and France.

“We will share our relevant experience with Nayara Energy to strengthen both the technological and environmental leadership of the company in the Indian market,” Mareterra founder Filippo Ghirelli said in a release.



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