Tatas to pick 26% stake in Nagarjuna refinery

NOC drama never seems to end. After lots of twists and turns, now Tata enters the game. Below I have pasted an excerpt from Iris News Digest.

Tata Sons is all set to pick a 26% stake in the Nagarjuna refinery at Cuddalore in Tamil Nadu. The Tatas will spend close to Rs 3,500 million for its stake in the Rs 13,700 million equity of the project, reports Business Line.

With this, Nagarjuna Oil Corporation Ltd, which is putting up a six million tonnes a year refinery, is all set to achieve financial closure shortly. IDBI has sanctioned its part of the Rs 33,800 million debt for the project and is also syndicating the loans, including the foreign currency debt.

With the Tatas coming in as an equity partner, the project is expected to get a boost and proceed smoothly. It was originally scheduled to go on stream in 2002, but the date was later put off to 2005.

The Nagarjuna group, as main promoters, will hold 51% equity in the project followed by Tamil Nadu Industrial Development Corporation (TIDCO), a State Government undertaking, 5%; Krupp Uhde, the technical collaborator, 7%; and Sun Itera, a joint venture between the Itera group, a leading producer and trader of natural gas in the CIS countries, Sun Energy of India, 10% and IDBI 1%.

TIDCO, which has been actively pursuing this project, is expected to convince the State Government to provide financial incentives as per the industry policy in vogue.