BPCL plans Rs 1,000-cr equity infusion in JV
By Subhash Narayan, TNN |
Highlights
NEW DELHI: Bharat Petroleum Corporation (BPCL) plans to bring Rs 1,000 crore equity into the joint venture company ��� Bharat Oman Refineries ��� which is implementing the 6-million tonne refinery project in Bina (Madhya Pradesh).
The equity investment would be precursor to a Rs 1,000-crore IPO that the company plans to float to part finance the Rs 10,300-crore Bina refinery. ���We are in no hurry for an IPO as there is no problem of funds for the Bina refinery. As per the agreement, BPCL has to bring in Rs 2,000 crore out of a total equity of Rs 4,000 crore in the project. We will bring Rs 1,000 crore first this year, and get the remaining capital subsequently,��� Ashok Sinha, chairman and managing director of BPCL, told ET.
He said that though the project is estimated to cost Rs 10,300 crore (60% debt and 40% equity), a decision on launching an IPO for the project would only be taken after the company arrives at a final capital cost for the proposed refinery. ���This would mean that IPO could be considered in 12 months, not before that,��� said Mr Sinha.
As per an earlier proposal, BPCL would hold 50% equity in the refinery, financial institutions 23% and 2% nominal stake by Oman Oil. It was proposed that for the remaining 25% equity, an IPO would be launched. Oman Oil was originally expected to take a strategic stake in the refinery but later it decided to restrict its investment.
Mr Sinha said that raising Rs 6,300 crore debt for the project would not be difficult once BPCL puts in the requisite capital. BPCL has already tied up almost entire debt portion through a consortium of banks led by the State Bank of India, he said.
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Proposed in the mid-1990s, the Bina refinery project was originally slated to function as a joint venture with Oman Refineries. Though the project cost has escalated over the years, Mr Sinha said it would be completed as per the original schedule of December 2009. The refinery has also been reconfigured now to conform to Euro IV requirements.Meanwhile, BPCL chairman said that the company was still reporting 0.20 paise loss per litre from retail sale of diesel. On petrol, however, the recent slide in international crude and product price has resulted the company gaining about Rs 1.50 from per litre sale.
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