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Wednesday, December 20, 2006

Bharat Oman plans Rs 1000cr public offer

Bharat Oman Refineries will make its initial public offering, IPO of Rs 1,000 crore in 2007 to raise money for the Bina Refinery in Madhya Pradesh, Ashok Sinha, chairman and managing director of BPCL, has said at a news conference here.

Bharat Oman was earlier an equal joint venture between BPCL and Oman Oil Company. Currently, Oman Oil holds only 2% stake in the venture. BPCL will offload 25% stake through the IPO, said Sinha.

Sinha said that the greenfield refinery project would cost about Rs 10,378 crore; a loan of Rs 6,400 crore has already been tied up with a consortium of 20 banks led by the State Bank of India. The equity component would be brought in over the next 12 months. This would include equity infusion by BPCL, strategic investors, as well as the funds raised through the IPO.

Scaling up capacity

Sinha said the refinery would have six million tonnes, MT per year capacity, which can be scaled up to nine MT per year. It will produce Euro IV compliant products and is expected to be operational by end of 2009, he said.

Sinha said that 4% of the Bina refinery project has been completed. For the refinery, a 1,000 km-long pipeline from Wadinar in Gujarat to Madhya Pradesh is being constructed, he said. The Madhya Pradesh Government has given local sales tax concessions of Rs 250 crore per annum, along with waiver of central sales tax for a period of 15 years to the refinery project.

He said that currently BPCL and all its group companies have a refining capacity of 20 MT; by 2009 this is expected to increase to 30 MT. The increase in the refining capacity will come through expansion of the Kochi Refinery from 7.5 MT to 9 MT and also through the new refinery in Bina, he said.

Sinha pointed out that the Mumbai Refinery in the current year attained full capacity utilisation of 12 MT. The Mumbai-New Delhi pipeline is also now completed; the pipeline would be operational by New Year.

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