Varun Group sells stake in Madagascar oil wells for $150 mn

Varun Industries has sold 51% stake in its onshore oil blocks in Madagascar  at an upfront payment of $150 million to China’s De Qing Group. The former has also said it will form a joint venture with Da Qing to explore the 6,884 square kilometer block in Madagascar.

Da Qing group has committed to arrange for oil exploration and necessary fund raising process for the program

Varun Industries said with the above arrangement Varun group will have the twin benefit of getting continued revenue through oil exploration process and also have liquidity which the group proposes to utilise for other previously programmed capex needs.

Kiran Mehta, chairman and managing director, Varun Industries said, “We are very excited about this partnership, which would open a new chapter in Varun's growth story. This is one of the major steps towards unlocking the value of our varied assets in Madagascar."

He added that this development gives the company the confidence and strength to nurture and develop its other Madagascar assets.

Varun Industries is a global conglomerate of businesses that includes stainless steel raw materials, steelware, mining, wind energy, oil & gas, gems and jewellery and commodity trading.

Meanwhile, share of the company climed 2% to Rs 239.75 post the announcement.