In talks with strategic investors.

ONGC has a 26 per cent stake, GSPCL 5 per cent and GAIL 19 per cent in the project which is being developed with a debt equity ratio of 70:30.

V. Rishi Kumar

Hyderabad, March 3 ONGC Petro-Additions Ltd (OPAL) is set to shortly achieve financial closure for its Rs 12,440-crore petrochemical plant at Dahej special economic zone (SEZ) in Gujarat.

The company is engaged in parleys with three strategic investors both for investment and assured purchase of produce from the plant, slated for commissioning by 2012.

The Chief Executive Officer of OPAL, Mr P.K. Johri, told Business Line that Linde of Germany and Itochu are among the companies they are currently in talks with for the plant being set up along with GSPCL and GAIL.

“We expect to finalise stake divestment after discussions with some more companies by the year end,” he said.

“The company has enlisted the services of SBI Caps for the debt component of Rs 8,800-crore for the project, led by a consortium of banks headed by the SBI. The closure of finances in this tough market conditions is a reflection of the confidence that financial institutions have on the promoters and the project,” he said.

ONGC has a 26 per cent stake, GSPCL 5 per cent and GAIL 19 per cent in the project which is being developed with a debt equity ratio of 70:30. “While strategic sale of equity would complete the equity component for the project, we will plan an initial public offer (IPO) coinciding with the plant commissioning,” he said.

The company has received in principle approvals for funding the project and the details are now being finalised.

DOWNSTREAM

The company will employ more than 3,000 people directly and indirectly for the petrochemical unit alone. However, once the project goes on stream, there could be significant opportunities for the company to play a role in downstream products.

DEVELOPERS

Taking the development process further, the company has chosen the Linde-Samsung consortium for an order worth Rs 6,800 crore, EIL as a project management consultant and IVRCL as the infrastructure developer for the project. The company has chosen Torrent Power for 200 MW and discussions are now underway.

Mr Johri said this will be the country’s largest petrochemical plant with a turnover of about Rs 12,000 crore a year.

The Director of IVRCL Infrastructures & Projects, Mr S. Ramachandran, who was present along with Mr Johri, said the company has been mandated with a Rs 837-crore order for infrastructure development for the project.

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(This article was published in the Business Line print edition dated March 4, 2009)
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