Essar Oil to raise $5 bn loan from 4 banks

Oil refiner Essar Oil is close to raising $5 billion in loans underwritten by four banks to fund the expansion of its refinery in western India, three bankers with knowledge of the deal said on Thursday.

Essar will raise $3.5 billion in 12-year, rupee-denominated loans underwritten by top lender State Bank of India, ICICI Bank and IDBI Bank, the bankers said.

It will also raise $1.5 billion in foreign currency loan from Standard Chartered and ICICI Bank, they said. "A couple of us have already signed the underwriters agreement. The other two will do it soon," said one banker, who declined to be identified because he was not authorised to speak to the media.

Essar is spending $6 billion to expand its 210,000 barrels a day refinery in western Gujarat state to 1 million barrels a day within three years. The bankers said the company's founders would bring in about $2 billion in equity for the expansion and working capital.