BASF SE (BASFY)

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Essar in talks for $2bn petrochemicals JV with BASF
28 July 2014

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Indian multinational conglomerate Essar is reportedly in talks with German firm BASF to establish a $2bn petrochemicals joint-venture (JV).
The negotiations are part of the company's strategy to become an integrated oil and gas firm, reported The Economic Times citing sources familiar with the matter.
Essar has created an integrated petrochemicals complex concept, which includes expansion of its refinery in Vadinar, Gujarat.
The company's refinery is capable of refining a wide range of crude and has annual production capacity of 20 million tonnes.
"These structuring and funding-related discussions are still ongoing."
Essar, which has more than $14bn net debt, wants BASF to finance the entire project at least for the initial years, the sources said.
However, the company intends to invest its share of equity over a three-to-five-year period.
One of the sources said: "It is still not clear if it will be an equal 50/50 JV or BASF will retain a 70% share.
"They would want majority (stake) since they are likely to finance the project almost entirely to start with.
"These structuring and funding-related discussions are still ongoing."
SBI Capital Markets, a wholly owned subsidiary of the State Bank of India, is currently preparing a financial feasibility report and detailed project appraisal.





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