Thursday, July 19, 2007

Little Help for L.N. Mittal…

India-born billionaire Lakshmi N Mittal is literally getting a helping hand from the government for his ambitious diversification from steel making to oil refining. Mittal is getting a senior bureaucrat from the Ministry of Petroleum and Natural Gas to run his first-ever venture in the refining business, the Rs 18,919 crore Bhatinda refinery.

"He is a good and capable man. We thought he can be of immense help in completing the much delayed project." Petroleum Minister Murli Deora told media here.

Mittal Energy Investments Pte Ltd, a subsidiary of Mittal Investments, has parked $110 million in an escrow account as guarantee for its 49 per cent stake in the 9 million tons Bhatinda refinery project. The project is being financed in 1.5:1 debt-equity ratio. Total equity investment by Mittal and HPCL would be Rs 3,577.50 crore each. The investment to be brought by Mittal is about 5 % Of FDI in 2006-07 and is the largest and first FDI in petroleum refining sector. The two partners would appoint three members each on GGSRL board and rotate the chairman's job every two years. The remaining 2% stake is with financial institutions.

HPCL chairman and managing director Arun Balakrishnan had earlier this month stated that the project would achieve financial closure by month end. The project is configured to process low cost sour and difficult crudes and convert them into high value products like petrol, diesel and LPG, he had said. Petrol and diesel quality would comply with Euro-IV emission norms.
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