Essar Oil is reportedly planning to ink a $1 billion loan deal with China Development Bank (CDB) during Chinese Prime Minister Li Keqiang's visit to Mumbai. The loan deal with the bank will be backed by supply of refined products from Essar's Vadinar refinery in Gujarat to top state oil producer PetroChina.
The heavily indebted groups for this will sign a three-way memorandum of understanding on a ‘funding for fuel’ agreement between itself, CDB, and oil producer PetroChina, which will be the first such arrangement involving a big Indian company. As per the agreement, PetroChina will buy fuel from Essar for 7 to 10 years.
The company as a part of initiative to dollarize debt has been in discussion with several international banks, including Chinese banks. CDB is part of this initiative.
