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At least three contenders, including BPCL, are vying for Nagarjuna Oil’s 6-million-tonne-a-year refinery that is on the block under the Corporate Insolvency Resolution Process.
According to sources, the public sector oil marketing company BPCL is among those likely to submit a resolution plan.
Others are an Oman-based company and another from Singapore, a source said declining to give more details.
Major consultants, including KPMG and Fox Mandal, are handling the due-diligence.
The State government is likely to recommit itself to a structured package of incentives that was formulated for the refinery project, Tamil Nadu’s largest private sector investment.
Sources said the MoU signed during the Global Investors Meet in 2015, which is effective, will be renewed to shore up investor confidence.
Project delay
With over 2,180 acres available with the project, and potential to acquire an additional 1,000-acre contiguous land, investors can expand the project to 30 million tonnes a year. This makes it an attractive proposition, the source said.
The Hyderabad-based Nagarjuna Oil Corporation was setting up the refinery at Cuddalore on the East Coast about 200 km to the south of Chennai.
Time and cost over-runs resulted in the ₹3,500-crore project planned to start in 2002 growing to ₹12,500-18,000 crore. In December 2011, the project site was hit by a cyclone and was stalled.
The total investment in the project at that time was estimated at ₹8,000 crore, including ₹4,500 crore expenditure and ₹3,500 crore interest. A consortium of 17 banks, which funded the project, was to have brought in an additional ₹7,000 crore debt as part of a restructure which did not materialise.
The Hyderabad-based Nagarjuna Oil refinery, which promoted the project held a 46.78 per cent stake (77.62 crore shares) in Nagarjuna Oil Corporation. Other shareholders in the project include TIDCO, the Tamil Nadu government industry promotion agency, with 1.65 per cent; Trafigura 19.79 per cent; Tata Sons 12.70 per cent; Tata Petrodyne 12.11 per cent; Cuddalore Port Co 3.66 per cent and Udhe Gmbh 3.31 per cent.
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