Mittal-HPCL reveals plan for Bhatinda refinery

Billionaire Lakshmi Mittal and his partner Hindustan Petroleum Corporation Limited (HPCL) will arrange finances for the Rs189.19 billion (US$4.7 billion) Bhatinda refinery project in July, aiming to complete the project by 2010-11. Mittal Energy Investments Private Limited, a subsidiary of Mittal Investments, has parked US$110 million in an escrow account as guarantee for its 49% stake in the 9-million-ton refinery project. HPCL Chairman and Managing Director Arun Balakrishnan said Guru Gobind Singh Refinery Ltd. (GGSRL) might also resort to external commercial borrowing to meet the debt requirement, as the difference between overseas and domestic borrowings was 3.5-4%. Total equity investment by the two firms would be Rs35.77 billion (US$888 million) each. HPCL will also hold a 49% stake in the project while Indian financial institutions would hold 2%. The two partners would appoint three members each on GGSRL board and rotate the chairman’s job every two years. (July 5, 2007)