Reliance Petroleum Ltd (RPL) will make a Rs 2,400 crore debenture issue to its promoters, Reliance Industries, and associates to fund its proposed 15 million tonne refinery in Jamnagar, Gujarat. The debentures, which will be fully convertible, will be issued in different tranches and offer a rate of 14 per cent.
The RPL board met yesterday to approve the issue after reviewing the cost of the refinery. The refinery cost has shot up from Rs 8,694 crore (estimated in 1995-96) to Rs 9,236 crore. The increase is mainly due to depreciation of the rupee versus the dollar from Rs 31.5 to Rs 36.8.
Of the Rs 9,236 crore, RPL has already tied up finances worth Rs 6,934 crore. In 1993, it made a public offering of Rs 2,172 crore in India.
More From This Section
This was followed up in 1996-97 by a $100 million convertible bond issue and a syndicated loan of $300 million without anyguarantee.
The proposed issue will hike the promoters holding in the company after the debentures are converted into equity, which is expected some time in 1999-2000. The refinery is expected to be commissioned around the same time.
Reliance Petroleum is setting up an integrated grassroots fuel refinery with a crude processing capacity of 15 million tonnes per annum at Jamnagar. The company plans to further raise the refinerys capacity to 22 million tpa.
A 1,000 mega watts power plant will also come up at the Jamnagar complex. The plant will be fuelled by the refinerys by-product, petroleum coke.
With the government not allowing private companies to set up marketing outlets for products like high-speed diesel and motor spirit, Reliance has entered into a marketing arrangement with Indian Oil Corp. The refinerys products will be evacuated through IOCs Kandla-Bhatinda product pipe-line.
However, 40 per cent of the refinerys products, like naphtha, will be utilised by the promoters petrochemicals and plastic complex at Hazira.