Cabinet to decide on Mittal-HPCL deal tomorrow

The cabinet committee on economic affairs (CCEA) will consider the petroleum ministry proposal to allow steel baron Lakshmi N Mittal to pick up 49% stake in state-run HPCL's Bhatinda refinery, Petroleum Minister Murli Deora said today.

"It will be decided in the cabinet tomorrow," Deora told reporters on the sidelines of a function here.

The petroleum ministry has granted project-specific approval to Mittal Investments, the holding company of L N Mittal, to pick up stake in the refinery.

The proposal was required as the current policy restricts foreign direct investment in public sector petroleum refineries to 26%. The current policy also restricts PSU holding at 26% in such projects, and makes it mandatory for the balance 48% to be offered to the public.

HPCL had, on March 2, signed an agreement with Mittal Investments for the nine million tonne refinery in Punjab.

Mittal Investments will acquire 49% stake in the refinery for Rs 3,365 crore through its 100% arm, Mittal Energy Investments Pte incorporated in Singapore.

HPCL will also hold 49% stake in the Rs 17,973 crore project, while the balance 2% would be allocated to financial institutions.