State-owned Indian Oil Company (IOC) on Thursday mentioned it’ll increase its stake within the three way partnership constructing a 9 million tonnes refinery at Chennai to 75% after the associated fee to the mission escalated by over 12%. Initially, IOC and its subsidiary Chennai Petroleum Company Ltd (CPCL) had been to carry a 25% stake within the three way partnership that was to construct a brand new unit adjoining to the prevailing refinery of CPCL. The remaining 50% fairness was to come back from monetary buyers. In a inventory change submitting, IOC mentioned its board at its assembly on Thursday “accorded approval for the revision in value of the mission from INR 29,361 crore to INR 33,023 crore”.
The fee elevated INR 3,662 crore or 12.5%.
“The Board has additionally accorded approval for revision within the capital construction of the three way partnership with 75% fairness from IndianOil and 25% fairness from CPCL,” it mentioned.
The corporate nevertheless didn’t give causes for the associated fee escalation.
IOC mentioned its board had on January 29, 2021 authorized the implementation of a 9 million tonnes a yr refinery at Cauvery Basin, Nagapattinam in Tamil Nadu by CPCL at an estimated value of INR 29,361 crore, to satisfy the demand of petroleum merchandise in southern India.
Alongside, approval was additionally given for the formation of a three way partnership between IOC and CPCL with fairness holding of fifty% and stability 50% to be held by monetary/strategic/ public buyers. Thereafter, the three way partnership firm named ‘Cauvery Basin Refinery and Petrochemicals Ltd’ (CBRPL) was included on January 6, 2023.
The unit was to come back up in 48 months.
IOC had deliberate to tug down the 1 million tonnes a yr Nagapattinam refinery of its subsidiary CPCL and construct the model new 9 million tonnes unit.
Nationwide Iranian Oil Co (NIOC) shouldn’t be a accomplice within the mission.
NIOC holds 15.4% in CPCL and was beforehand eager to take part within the growth mission. Nevertheless, US sanctions on Iran had put constraints on that.
NIOC’s funding in CPCL had been made a number of years again and that as such is not going to draw any influence of US sanctions however the influence of recent funding within the firm might have risked sanctions.
IOC holds a 51.89% stake in CPCL.
