Bharat Petroleum Corp Ltd is planning to launch an initial public offer (IPO) of its Bina refinery unit next year, Chairman of the state-owned firm S Varadarajan said today.
India’s second biggest state refiner, BPCL will hold 50 per cent in Bharat Oman Refineries Ltd (BORL), which had built the unit, while Oman Oil Company will hold the remaining 26 per cent. The IPO “is planned for next year,” Varadarajan said.
BPCL is pressing ahead with investing $4 billion in expanding Bina refinery capacity. The capacity of Bina refinery in Madhya Pradesh is planned to be raised to 15 million tonne in two phases to 7.8 million ton a year from current 6 million tonne at a cost of Rs 35 billion by 2018, and then to 15 million ton at an additional investment of Rs 180-200 billion in 5-6 years, he said.
In 2009, OCC paid 50 per cent premium for a re-entry into the Rs 113.97 billion Bina refinery project. The project was originally conceived through a joint venture company, BORL but the OCC did not contribute equity beyond the initial Rs 750 million.
The Omanese oil major came back to pick up 26 per cent stake in the project for an additional Rs 12.20 billion. The BORL was formed as an equal joint venture company way back in 1993. However, following inordinate delays in the implementation of the project, OOC froze its investment in the company at Rs 750 million for a two per cent equity stake.
BPCL provided the unbridged portion of the Rs 40 billion equity in form of loan. The state—run firm got its loan back once OOC made payments for its 26 per cent share. The remaining 25 per cent is with financial institutions.