Pratim Ranjan Bose

Kolkata, Feb. 2

BPCL is now working hard for the financial closure of Bina Refinery - taken up through its subsidiary Bharat Oman Refineries Ltd (BORL) - so that it can be wrapped up by March 31, 2005. The company is also considering an early IPO to part-finance the project.

According to sources, the company have already tied up loan finance from 15 banks and financial institutions and is negotiating with nine more financing agencies.

"There are a total of 24 banks and FIs in the fray. We are expecting to tie up the entire loan finance part within a month so that the financial closure can be declared by the end of next month," a BPCL official said.

SBI Capital Markets has been named merchant banker, but the lead banker is yet to be decided on.

The six-million-tonne refinery is estimated to cost around Rs 9,100 crore. The Madhya Pradesh Government has announced 15-year tax deferment to the project.

BPCL will invest close to Rs 1,800 crore towards 50 per cent equity capital.

Of the rest, Oman Oil will hold three per cent, 22 per cent will be offered to a strategic partner, and the remaining 25 per cent is scheduled to be offered to the public.

While the strategic partner is yet to be firmed up, BPCL authorities are considering an early IPO to ensure fast track implement of the project.

"We have considered the option. However, we have not taken any view on it," the official said adding that all such things will come up for further consideration after financial closure and commencement of implementation.

"Also, the market conditions will play the role of a deciding factor," the official added.

(This article was published in the Business Line print edition dated February 3, 2006)
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