Essar Seeks $350 Million From Russia-Backed Nayara In Brand Pact: Report

Essar, built by brothers Shashi and Ravi Ruia, sold Essar Oil to a group backed by Russian oil major Rosneft for about $13 billion in 2017 as part of efforts to raise funds to settle $25 billion which it owed to Indian banks.

Essar Group has asked Nayara Energy to pay about $350 million upfront for a brand licensing deal struck 5 years ago when Essar Oil was sold to the Russian-led group, instead of staggering the payment, sources familiar with the matter said.

Essar, built by brothers Shashi and Ravi Ruia, sold Essar Oil to a group backed by Russian oil major Rosneft for about $13 billion in 2017 as part of efforts to raise funds to settle $25 billion which it owed to Indian banks.

At the same time Essar Oil, now known as Nayara Energy, and Essar affiliate Abhinand Ventures Pvt Ltd signed a 99 year deal which allowed Nayara to use Essar's brand by paying an annual license fee of $32 million for 20 years and $1 for 79 years.

It also gave Abhinand Ventures a right to seek 15 years of license fee upfront, using some discounting after a 5-year lock-in period expired, the three sources told Reuters.