Financial Daily from THE HINDU group of publications
Wednesday, Oct 01, 2003
Financial Daily from THE HINDU group of publications Wednesday, Oct 01, 2003 |
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Petroleum Corporate - Announcements ONGC extends comfort letter to MRPL for raising Rs 450 cr Archana Chaudhary
Mangalore , Sept. 30 THE ONGC board of directors has offered to extend a comfort letter for Rs 450 crore to enable its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) to raise funds for its working capital. Mr Subir Raha, Chairman, told reporters after MRPL's first annual general meeting since ONGC bought majority stake in the company, that the letter will help MRPL raise money to fund its working capital requirements. MRPL has planned investments of Rs 625 crore for upgradation and de-bottlenecking of manufacturing processes at its 9.6 million-tonne refinery. It also plans to invest Rs 75 crore to manufacture mix xylenes. ONGC has sent its proposal to Hindustan Petroleum Corporation Ltd (HPCL) for buying out its 17 per cent stake in MRPL, Mr Raha said. He said growth plans of the 9.69 million-tonne refinery were integrated with that of ONGC. MRPL, which had reported losses of Rs 412 crore last year, has reduced its losses considerably during this financial year, Mr Raha said. Interest outgo in the first half of the fiscal year was down to Rs 201 crore (Rs 277.5 crore). MRPL is expected to cut its losses to Rs 188 crore at the end of the current financial year, he said. MRPL has been exporting almost 50 per cent of its products with losses of Rs 800 to 1,000 per tonne on fuel oil exports, a senior official said. The company has found it difficult to sell products in India because its allocated share in the Industry Logistics Plan, jointly drawn by refining and marketing companies, has been restricted to two-thirds its capacity. "MRPL has requested the Petroleum Ministry and industry members to change its share from 6 mt to 9 mt. But it has not received co-operation from industry members," Mr Raha said. "The company has also met with difficulties in evacuating products through the 362.3-km Mangalore-Hasan-Bangalore pipeline because of `freight disputes' between Mangalore Bangalore Pipeline Ltd (MHBPL) and the marketing companies," he said.
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