SBI commits finances to Bathinda refinery project

Chandigarh, July 27 (UNI) State Bank Of India (SBI) led consortium of 26 lenders, including banks and LIC, has committed Rs 7,793 crore to Guru Gobind Singh Refinery Ltd (GGSRL), to be set up at Bathinda in Punjab.

SBI Capital Markets Ltd (SBICAP), the number one mandated lead arranger and advisor in Asia Pacific as per Thomson PFI, will be the sole financial advisor and arranger for the project, India's largest FDI under public/private partnership. The syndication was over subscribed by Rs 800 crore.

GGSRL is a JV between HPCL and Mittal Energy Investments Pte Ltd, Singapore. The money will be used to construct a 9MMTPA greenfield refinery at Bhatinda in Punjab.

The project, which has a debt-equity ratio of 1.5:1, envisages an outlay of Rs 13,789 crore. HPCL and Mittal Investments will be equal partners in the JV (49 per cent each). The remaining two per cent will be raised from financial investors.

The entire debt is designated in Indian Rupees. Flexibility has been provided to change the financing mix during the construction period to suit the project requirements. The financing for this project is being done in one tranche.

Mr R Sridharan, CEO and MD, SBI Capital Markets said today It is a privilege to be a part of country's largest FDI under public/private partnership project. The northern region of the country is the largest and fastest growing market and is facing large demand supply mismatch of petroleum products and with the commissioning of the Bhatinda refinery, this mismatch will be reduced.

The refinery will commence production from January 2011 and will produce the petroleum products compliant with Euro IV emission norms. As the refinery will have a Nelson Complexity Index of 9.6, it will be in a position to process a variety o crudes and also produce petrochemical products.

UNI