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By Sumeet Chatterjee and Nidhi Verma
MUMBAI/NEW DELHI, June 11 (Reuters) - India’s Essar Group plans to sell the Stanlow refinery in Britain, three sources familiar with the matter said.
Essar is seeking to raise $500-$600 million for the plant in the northwest of England, two of the sources said. However other plants recently put up for sale in the UK, Murco’s Milford Haven and the Bankrupt Petroplus’s Coryton, have failed to find buyers.
Essar Energy, the subsidiary of Essar Group that bought the refinery for $350 million from Shell in 2011, declined to comment.
Stephen George, chief economist at KBC Process technology, said the price being sought could be hard to achieve.
“It would be optimistic in the current margin environment to expect that the asset has increased in value, though Essar have made strides to improve the configuration and margin of Stanlow which may improve the asset value,” he said.
A formal sales process will be launched after all the requirements related to the delisting of Essar Energy from the London Stock Exchange, two of the sources said.
Essar Energy shares ceased trading on the London Stock Exchange on Tuesday, and the formalities of making the company a privately held company wholly owned by Essar Global Fund Limited (EGFL) are set to be completed by next month.
EGFL, the investment vehicle of Essar Group, announced earlier this year that it would de-list its UK operation.
In 2012 Barclays took control of existing crude and refined oil assets at the plant, so it is unclear whether any purchase of the plant would include those assets, which could be worth hundreds of millions of dollars.
Barclays was not available for comment on current arrangements.
Caught between soaring crude prices and collapsing diesel profits, European oil refiners are slashing operating rates by nearly a quarter ahead of the peak summer period. (Additional reporting and writing by Simon Falush in London; Editing by Louise Heavens and Pravin Char)