The Hindu Business Line : Bhatinda refinery: SBI team lending Rs 7,793 cr

Mumbai, July 28 A consortium of lenders led by State Bank of India has committed Rs 7,793 crore to Guru Gobind Singh Refinery Ltd, which is setting up a 9 million tonne refinery at Bhatinda in Punjab.

The company is a joint venture between Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investments Pvt Ltd, Singapore. HPCL and Mittal Investments will be equal partners in the company (49 per cent each). The remaining 2 per cent will be raised from financial investors.

Funding mode

The project, which has a debt equity ratio of 1.5:1, envisages an outlay of Rs 13,789 crore. The entire debt is designated in Indian rupees.

The financing for this project is being done in one tranche, according to SBI Caps, which was the sole arranger of the debt. The syndication, which was over subscribed by Rs 800 crore, consists of 26 lenders, said a press release issued by SBI Caps.

Mr R. Sridharan, CEO&MD, SBI Capital Markets, said: “The northern region of the country is the largest and fastest growing market and is facing large demand-supply mismatch of petroleum products. With the commissioning of Bhatinda refinery, this mismatch will be reduced.”

The refinery will commence production from January 2011, and will produce the petroleum products compliant with Euro IV emission norms.

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