Diversified public-listed firm Varun Industries is selling 51 per cent stake in its onshore oil block located in Madagascar to China’s Da Qing Oil Field Company for $150 million (Rs 807 crore), the company has disclosed in a statement to the Bombay Stock Exchange today.

Varun Industries holds exploration rights for the 6,884 sq. km. onshore oil block in Madagascar. Under the deal, it is selling majority stake in the oil block by forming a joint venture agreement with Sure King Varun Hong Kong Ltd, a special purpose vehicle between Varun Group and Da Qing Oil Field, the statement has added.

Incorporated in 2000, Da Qing is engaged in exploration of crude oil in China. It also offers various exploration and development services including oil refining, pipe transportation, research and technical support.

With the stake sale, Varun Industries will continue to have a significant equity interest and funds for other previously announced capex needs.

Besides paying an upfront $150 million, Da Qing has also committed to arrange for oil exploration and necessary fundraising for the programme.

At 1:42 pm, shares of Varun Industries were trading at Rs 240.80 a unit on the BSE, up 2.8 per cent from the previous close.

Founded in 1989, Varun Industries has business operations across stainless steel ware, wind power energy, oil/natural gas, mines & minerals, gem & jewellery and agro businesses.

“This is one of the major steps towards unlocking the value of our varied assets in Madagascar. This development will help us develop other Madagascar assets that we own,” said Kiran Mehta, chairman and managing director of Varun Industries while commenting on the stake sale.

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