UAE-based investor show interest in Tamil Nadu refinery

Company gets board approval to sell NOCL's equity shares to the new investor

Nagarjuna Oil Refinery Ltd (NORL) has said that it got board’s approval to dilute 46.78 per cent in Nagarjuna Oil Corporation (NOCL), a company set up by NORL, which is setting up a 6 million tonnes oil refinery in Tamil Nadu. The company said that it is planning to an investor based in Ras Al Khaimah.
 
It may be noted, this is the second time the company has said that an investor has shown interest in investing in the project. Early this year the company has said Singapore-based Netoil (Singapore) (PTE) has shown interest in investing in the project and agreed to infuse Rs 3,600 crore. However, the deal did not happen.
 
On Tuesday, the company said it has received the Board’s approval to sell 77,62,20,000 equity shares of Rs 10 each held by the company in NOCL aggregating to 46.78 per cent of its equity sahre capital to Allied Machineries and Resources Holdings (AMR), a company based in Ras Al Khaimah for a consideration of Rs 2.50 per share of face value of Rs 10 subject to the approval of the membeRs of NOCL, lendeRs and such other requisite approval by the membeRs of the company.
 
Sources in the company said that it need about Rs 4,000 crore equity so that around Rs 8,000 crore of debt can be raised to revive the project. The project was delayed due to damages caused by a cyclone some yeaRs back and also hit by the global economic slowdown later.
 
Around 15 lendeRs have invested in the project and later the Banks sought Reserve Bank of India’s dispensation in view of the assets likely to be classified by RBI as non-performing(NPA).
 
The 6 million tonne refinery is the fiRs t phase of a Rs 25,000 crore project in which the total capacity was expected to be around 12 million tonne.