New Delhi: India-born billionaire Lakshmi N Mittal will invest Rs 3,200 crore for a 49 per cent stake in Hindustan Petroleum Corp Limited's (HPCL) under-construction Rs 16,200 crore refinery at Bhatinda in Punjab.
“A partnership agreement for Bhatinda has been reached. Mittal Investment Sarl and HPCL will hold 49 per cent stake each in the refinery project while the remaining two per cent will be offered to financial institutions," Petroleum Minister Murli Deora said.
State-run oil explorer Oil India Ltd (OIL) may join the project at a later date and may get 10-15 per cent equity stake, leaving HPCL with 36-41 per cent stake.
Deora said HPCL board on Monday cleared Mittal joining the nine million tonnes per annum refinery, which is likely to be commissioned by 2010-end and the two companies will shortly sign a joint venture agreement.
As per the broad understanding reached between the two firms, Mittal will hold 49 per cent stake in the Guru Gobind Singh Refinery Limited, the company implementing the project.
HPCL will also hold 49 per cent stake if OIL, which is doing due diligence of the project, does not join the refinery project.
In case OIL does not join, the remaining two per cent stake would be offered to financial institutions.
“Initially, discussions centered around HPCL-Mittal-OIL holding equal stake in the project and offering the rest through an initial public offering closer to commissioning of the refinery. Now, the equity pattern has undergone a change. The IPO may be considered at a later date,” a source said.
Mittal Investments is completely owned by the Mittal family and is registered in Luxembourg. It holds 38 per cent in Mittal Steel Company, the Netherlands-based flagship company of the L N Mittal Group.