The Hindu Business Line : Spice Energy’s oil, gas investments hit by meltdown

Kolkata, Jan. 29 The economic meltdown seems to have impacted the implementation of a slew of big budget investments – primarily in the areas of oil and gas and power – proposed by the Delhi-based Spice Energy Group.

According to company sources, Spice Energy is promoted by Mr Sanjiv Malhotra (former co-promoter of SpiceJet), Mr Ravi Chilukuri (CEO) and Mr Gagan Rastogi and his family. The group claims to have management control over two listed entities at BSE: CALS Refinery and Hitkari Fibres (now proposed to be renamed SRM Energy).

According to Mr D.S. Sunderajan, CFO, Spice acquired management control in both the companies during end-2007-08 to use them as shell companies for its energy foray. According to data available at BSE, Spice controls 14.71 per cent at Hitkari and 0.11 per cent stake (through SRM Exploration) at CALS.

Both the companies had hardly generated revenue during this fiscal. Though Spice does not have any significant source of revenue generation or internal accrual, in end 2007 the group proposed setting up a five million tonne refinery through CALS at Haldia in West Bengal at an estimated cost of $1.1 billion or Rs 5,400 crore at the current exchange rate. CALS had also issued a $200 million GDR at Luxemburg in December 2007 to this effect.

Resource mobilisation

Also planned was a follow-on resource mobilisation of $250 million through FCCB financial closure latest by October 2008. None of them has taken place till now.

The project slated to be commissioned in 2010 proposed using second-hand operational units of PetroCanada and Bayernoil in US and Germany coupled with addition of a few new units. The West Bengal government has already handed over 400 acres at Haldia for the purpose.

Spice also proposed setting up a 2.5 million tonne LNG terminal at Haldia, two thermal power plants of 2,000 MW each one in the Eastern region and other in Tamil Nadu through SRM Energy (Hitkari Fibre).

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