The Hindu Business Line : Essar may raise Rs 3,000 cr from overseas market

Mumbai, Aug 31 Private sector oil major Essar Oil, which is on an expansion spree, plans to raise about Rs 3,000 crore ($750 million) from the overseas market.

“The board of the company has decided to seek approval of the members by passing an enabling resolution at the ensuing AGM for issue of FCCBs/GDRs/ADRs or other convertible financial instruments outside India on preferential issue basis for an amount not exceeding $750 million,” the company said in an announcement to the BSE.

“The funds would be primarily used for Vadinar expansion project,” said a company spokesperson. The company has decided to convene the 17th Annual General Meeting on September 29.

The company is enhancing capacity to 16 million tonnes (mt) (3.20 lakh bpd) from 10.5 mt (2.10 lakh bpd) at its Vadinar refinery in the special economic zone in Gujarat with a total investment of $1.2 billion.

The project is expected to be complete by 2010.

It would enable Essar to process heavy and soar (high sulphur) crude. The refinery now runs at 7.5 mt capacity and is expected to reach its full capacity by October.

Essar’s refinery is the second such project in the private in state-dominated oil sector. Reliance Industries runs a 6.60-lakh bpd refinery also in Gujarat.

Essar restarted its refinery on August 14 after a shutdown of three weeks to integrate two secondary processing units.

The refinery can produce LPG, naphtha, diesel, vacuum gas oil, jet fuel, kerosene, fuel oil and petrol. After the upgradation, Essar Oil will be able to produce petrol and diesel to Euro-III and Euro-IV standards.

Besides exports, petrol and diesel are transported by rail and road to about 1,100 Essar petrol stations in Gujarat, Maharashtra, Madhya Pradesh and Rajasthan.

The company exports 70 per cent of its products.

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