Trafigura exits Nayara Energy; sells stake to Mareterra Group

New Delhi: Global commodity trader Trafigura on Wednesday announced its exit from Nayara Energy after it sold its 24.5 per cent stake to Italy's Mareterra Group Holding for an undisclosed sum of money.

Mareterra, formerly known as Genera Group Holding, acquired the stake through a special-purpose vehicle, Hara Capital Sarl, incorporated in Luxembourg.

Mareterra is an energy investment group with a focus on energy and carbon efficiency infrastructure.

Trafigura had in its Annual Report for the year ended September 2021, indicated its intent to divest its indirect shareholding in Nayara.

In a statement, Trafigura said it has completed the sale of its 24.5 per cent indirect minority interest in Nayara Energy Limited to Hara Capital Sarl.

"This follows receipt of all applicable bank and regulatory approvals," it said without giving financial details.

Nayara, formerly Essar Oil, was acquired by a consortium led by Russian oil major Rosneft in August 2017.

An investment consortium SPV, Kesani Enterprises Company Limited, comprising Geneva-based Trafigura and Russian investment group United Capital Partners (UCP) acquired a 49.13 per cent stake.

Nayara Energy operates the second largest single-site refinery at Vadinar in Gujarat with a current capacity of 20 million tonnes per annum and over 6,500 petrol pumps across the country.

"Over the past five years, Nayara Energy's shareholders have supported the world-class Vadinar oil refinery to stabilise its operations following a period of underinvestment.

"This has included raising international bank financing and developing a 450,000 tonnes per annum polypropylene plant which has received environmental clearance and which marks the first phase of Nayara Energy's entry into petrochemicals," the statement said.

As the new shareholder, Mareterra Group will bring new expertise aligned with Nayara Energy's current focus and future growth, it said.

Headquartered in Rome, Mareterra Group Holding is predominantly active in Italy, Luxembourg, France, and Spain and is expanding its reach to include regions outside of Europe.

"As a new shareholder in Nayara Energy, it will bring its strong experience in reducing the carbon footprint of fuel stations, installing electric charging stations and improving energy efficiency at industrial assets. The Group will also support Nayara Energy's strategy to become a major petrochemical producer," the statement said.

Over the past two years, Mareterra Group Holding has installed innovative pumping systems and charging systems for electric cars across Italy and France, which have helped to reduce CO2 emissions.

"We believe that reducing energy costs is possible in all industries, especially in the context of the energy transition. Nayara Energy is already implementing a number of low-carbon projects, plans to become a major manufacturer of petrochemical products, and is actively developing its network of retail service stations.

"In this context, we will share our relevant experience with Nayara Energy to strengthen both the technological and environmental leadership of the company in the Indian market," said Filippo Ghirelli, founder of Mareterra Group Holding.

UCP managing director Irina Lanina said UCP remains committed to its investment in Nayara Energy and believes in its future growth opportunities.

"We expect that the Mareterra Group will support Nayara in its next phase of development, including successful implementation of the company's energy transition initiatives, petrochemical expansion strategy and technological innovation," Lanina said.

Nayara Energy recently announced that it has made significant progress on the planned phase-1 execution of its petrochemical project. The first phase of the development had achieved over 85 per cent progress by late December 2022, and the company expects production of its first petrochemical product, polypropylene, by Q4 of 2023.

With its strategically located refinery in Western India, the largest petrochemical consumption region of the country and its proximity to its jetty, the company is well-positioned to make a strong entry into this high-growth segment.

Nayara has undertaken a series of measures to cut down its carbon footprint and raise its sustainability quotient across operations. The company is also increasingly switching to green sources of energy at its various facilities to decarbonise operations.

With Mareterra Group coming on board as an indirect shareholder, Nayara's journey towards sustainability and decarbonisation is expected to receive further impetus.

This relationship should enable Nayara Energy to leverage Mareterra's experience and expertise to reduce its carbon footprint, and make its operations more sustainable while driving energy efficiency at its facilities.