Business Daily from THE HINDU group of publications
Monday, Nov 16, 2009
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Business Daily from THE HINDU group of publications Monday, Nov 16, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Petroleum Corporate - Mergers & Acquisitions Oman Oil picking up more stake in BPCL’s Bina refinery Oman Oil had frozen its investments at Rs 75 crore It will now pick up additional equity for Rs 1,220 crore. Post-IPO, BPCL will be the single largest shareholder with 49 per cent Oman Oil will land up with 26% stake The combined equity structure of the project will be Rs 2,600 crore 
A BPCL outlet Our Bureau Mumbai, Nov. 15 Oman Oil Company is back as an equity partner with Bharat Petroleum Corporation in the six million-tonne Bina refinery scheduled to be commissioned in the second quarter of 2010-11. Oman Oil will now pick up additional equity in the project for Rs 1,220 crore, which effectively means that its net contribution is Rs 1,295 crore. The company had frozen its investments at Rs 75 crore, translating into a 2 per cent stake, years ago and sources say that it has now paid closer to 80 per cent premium for the balance. Oman’s participation in the Rs 11,400-crore refinery also means that the initial public offer (IPO), planned closer to the commissioning of the project, will now be trimmed to Rs 1,400 crore. Post-IPO, the combined equity structure at Rs 2,600 crore will see BPCL being the single largest shareholder with 49 per cent and Oman Oil with 26 per cent. The Madhya Pradesh Government will have a 1 per cent stake with the public and financial institutions accounting for the balance 24 per cent. The debt component of Rs 7,000-crore plus has already been tied up, sources say. Growing interestOman Oil had capped its investments earlier at Rs 75 crore because the project was just not getting off the ground, nearly 15 years after it was first conceived. This is when BPCL decided to take charge of its completion. “The effort has paid off since Oman had paid substantial premium for its balance equity,” sources said. At one point, the Oil and Natural Gas Corporation was also keen to participate in the equity of the Bina refinery as part of its vision to enter the downstream sector. Even before Oman Oil decided to revisit the project, there was a lot of interest from other investors in the global refining arena. The Bina refinery is critical to BPCL from the viewpoint of easier supply of products in north and central India. Its refining presence has thus far been confined to the West (through its Mumbai refinery) and South (Kochi Refineries), with the void in the northern region getting to be a bit of a bother over the years. With consumption of petrol and diesel on the increase, particularly in States such as Bihar, Bina refinery will be ideally suited to meet this requirement. BPCL open to Oman Oil hiking stake in Bina refinery Investors queue up for BPCL’s Bina refinery More Stories on : Petroleum | Mergers & Acquisitions | Overseas Investments
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