Indian-born British steel magnate LN Mittal will pick up a 49% stake in the Rs. 16,700 crore-greenfield refinery project at Bathinda in Punjab with an investment of around Rs. 3300 crores. The refinery is being set up by Hindustan Petroleum Corporation Limited (HPCL). This is the first foreign direct investment in the refinery sector. HPCL will sign a JV with Luxembourg-based Mittal Investments for the 9 mmtpa Guru Gobind Singh Refinery project and allied facilities at Bathinda. Mittal Investments is wholly owned by the Mittal family and is registered in Luxembourg. It holds 38% in Mittal Steel Company.
Earlier, on two occasions, HPCL failed to forge alliances with British Petroleum of the UK and Saudi Aramco of Saudi Arabia. HPCL and Mittal Investments will hold 49% equity each in the project, while the balance 2% will be held by financial institutions. It is expected that a formal agreement between the two partners will be signed during the proposed visit of Mr. Mittal on March 2. Public sector Oil India (OIL) may also join the project at a later date and may get a 10-15% stake in the project out of HPCL’s 49%. The HPCL board had cleared the JV proposal on Monday. The project is expected to be commissioned by 2010.
Read The Economic Times article.
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