ONGC to lend Rs 5,000 cr to MRPL for part-financing proj
State-run Oil and Natural Gas Corporation will lend Rs 5,000 crore to its subsidiary Mangalore Refinery and Petrochemicals Ltd for expansion projects.
New Delhi: State-run Oil and Natural Gas
Corporation will lend Rs 5,000 crore to its subsidiary
Mangalore Refinery and Petrochemicals Ltd for expansion
MRPL is expanding its refining capacity to 15 million
tons a year from present 9.68 million tons per annum at a cost
of Rs 12,160 crore. Besides, it is setting up a 450,000 tons a
year propylene unit at an investment of Rs 1,804 crore. Both
the projects are scheduled for commissioning by March 2012.
"We will lend Rs 5,000 crore to MRPL at 3.85 percentage
points lower than State Bank of India`s prime lending rate,
which presently works out to 7.9 per cent," ONGC Chairman and
Managing Director R S Sharma said.
Propylene can be converted into polypropylene, which is
used in a wide range of industries.
While MRPL will spend another Rs 5,000 crore from
internal accruals, it would raise the balance Rs 4,000 crore
in overseas debt by March 2012, MRPL Director (Finance) L K
MRPL Managing Director U K Bose said MRPL was ready to
produce Euro-IV grade petrol and would begin production of
same grade diesel from April.
The company may import 12.1 million tons of crude oil in
2010-11 fiscal, he said.
Basu said the company was also planning to invest Rs
1,000 crore in setting up a single-point mooring facility near
the Mangalore port. SPM would help MRPL import crude oil in
very large tankers.
ONGC holds 71.62 per cent stake in MRPL while HPCL has
about 14 per cent.
Sharma dismissed reports of HPCL wanting to exit MRPL
saying "they are pure rumours and are totally incorrect."