Essar rumored to be closer to buying Shell’s U.K. refinery

Amidst media reports that Essar group is close to acquiring Royal Dutch Shell’s 9 million ton Stanlow refinery in the U.K., Essar has successfully closed its US$500 million convertible bond issue on Wednesday, January 19. The process of negotiation is on, but there’s a lot of details yet to be discussed, according to media reports. “The company has been in talks with Shell for over a year now, and the deadline for concluding the deal is set for the end of February.” Essar has raised bonds primarily for financial flexibility, and not specifically for the Shell acquisition, the report said. Essar was earlier in talks with Shell for three European refineries, but in the meanwhile Shell has sold its Heide refinery to private equity firm Klesch & Co. Ltd. After failing to find a buyer for the entire Hamburg facility, Shell has decided to shut down its fuel-processing facilities in Hamburg and convert it into a terminal. It will be looking for buyers for its lubricant plant there, the company said. Even though the negotiations are non-exclusive, people close to the process said that there are no other credible buyers in sight for the Stanlow refinery. Essar is reported to have made an offer of US$350 million, a figure that neither side would confirm or deny. (January 20, 2011)