Comments
Nagarjuna Oil Corporation hopes to get concrete resolution plans by early December with proposals to restart the stalled oil refinery project.
According to sources, at least 20 potential investors — some of them multinationals — had submitted initial Expressions of Interest (EoI) following a call from the National Company Law Tribunal-appointed Resolution Professional.
A committee of creditors consisting of over a dozen banks with funds stuck in the project met recently and about a dozen bidders have been shortlisted. Plant visits for the bidders to directly assess the construction site are being organised.
Firm resolution proposals are expected in the first week of December, the sources said.
The committee is also willing to consider more resolution plans as long as they are from credible investors, the sources added.
Nagarjuna Oil’s 6-million-tonne-a-year refinery was coming up at Cuddalore, about 200 km south of Chennai on the East Coast. The ₹3,500-crore project was to start production in 2002. But after cost and time overruns, estimates mounted to ₹12,500-18,000 crore. A storm in December 2011 ravaged the project site, resulting in the project being stalled.
Total investment The total investment in the project at that time was estimated at ₹8,000 crore including ₹4,500 crore in expenditure and ₹3,500 crore in interest. A debt restructure by a consortium of 17 banks fell through earlier. Attempts by Netoil of Singapore and Allied Machineries and Resources Holdings Inc of Ras Al Khaimah (UAE) to acquire the project also did not happen.
At that time, Hyderabad-based Nagarjuna Oil Refinery, which is setting up the project, held a 46.78 per cent stake (77.62 crore shares) in Nagarjuna Oil. Other shareholders in the project include TIDCO, the Tamil Nadu government industry promotion agency, which holds 1.65 per cent (2.74 crore shares); Trafigura 19.79 per cent (32.84 crore shares); Tata Sons 12.70 per cent (21.07 crore shares); Tata Petrodyne 12.11 per cent (20.08 crore shares); Cuddalore Port Co 3.66 per cent (6.07 crore shares); and Udhe Gmbh 3.31 per cent (5.48 crore shares).
At one time the project was Tamil Nadu’s flagship private sector investment meant to anchor the development of the State’s PCPIR (Petroleum, Chemical and Petrochemical Investment Region).
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.