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IndiaPosted at: Apr 27 2016 9:19PM


Cabinet go-ahead for BPCL to raise stake in subsidiary

New Delhi, Apr 27 (UNI) The Union Cabinet today gave its nod for state-owned Bharat Petroleum (BPCL) to raise its stake in Bharat Oman Refineries (BORL) up to Rs 3,000 crore. BOR is a subsidiary of BPCL and Oman Oil Company Ltd. The investment amount could be made by BPCL via subscription of convertible warrants / other instruments giving right to convert it into equity shares to be issued by BORL, beyond DPE guidelines of August 2005, said an official release. The infusion of funds by the BPCLs will enable BORL to overcome the implications on account of the erosion of the net worth. Besides, it will enhance the availability of petroleum products in the northern and central parts of the country, industrial development of Madhya Pradesh and substantial increase in employment and tax earnings in the state. The BORL has commissioned the 6 MMTPA (120 Thousand Barrels Per Day) refinery at Bina in Madhya Pradesh, in June, 2011 at a project cost of about Rs 12,754 crore. Currently the refinery is operating at 100 per cent of its installed capacity. The company now proposes to undertake a debottlenecking project at the refinery to further increase the refining capacity from 6 MMTPA to 7.8 MMTPA. The estimated project cost is Rs 3,072 crore, with an overall implementation schedule of 36 months from date of receipt of environmental clearances (Zero Date). The highlights of the proposal for debottlenecking project include certain modifications to produce products in accordance to the new Auto Fuel Policy. Hence, there is a need for immediate infusion of funds in BORL by the shareholders. OOCL while expressing their support for the project had indicated that they are not prepared to commit further funds for the project at this stage. Therefore, BPCL Board has decided to infuse funds to the tune of Rs 3,000 Crore for funding the debottlenecking project and for meeting the extraordinary losses suffered on account of the sharp fall in the prices of crude oil and finished products. Accordingly, the Government has decided to grant approval to the proposal of BPCL to enhance its investment in BORL by an additional amount of up to Rs. 3,000 crore for completion of the de-bottlenecking project. UNI NM SB 2118
Tags: #Cabinet go-ahead for BPCL to raise stake in subsidiary
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