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Chennai Petro, Indian Oil, partners sign JV agreement for Rs 31,580 crore refinery complex in Tamil Nadu

Chennai Petro, Indian Oil, partners sign JV agreement for Rs 31,580 crore refinery complex in Tamil Nadu

Chennai Petro, Indian Oil, partners sign JV agreement for Rs 31,580 crore refinery complex in Tamil Nadu
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By CNBCTV18.com Nov 25, 2022 10:39:15 AM IST (Published)

The refinery complex will be built at a cost of Rs 31,580 crore and will cater to the demand for petroleum products in South India.

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Chennai Petroleum Corporation, Indian Oil Corporation and their seed equity partners have signed a Joint Venture agreement for the proposed grass root refinery and petrochemicals project at Nagapattinam in Tamil Nadu.
The refinery complex will be built at a cost of Rs 31,580 crore and will cater to the demand for petroleum products in South India.
Indian Oil and Chennai Petroleum will together hold 50 percent stake in the company and the rest would be held by financial and strategic investors. Indian Oil & Chennai Petroleum are classified as promoters of this complex.
ICICI Bank and Axis Bank together will own 10 percent of the total paid-up capital in the joint venture. Both banks will acquire 5,000 equity shares of the target entity which will have a face value of Rs 10 each.
The overall capacity of the refinery will be 9 Million Metric Tonnes Per Annum (MMTPA). The refinery will produce petroleum products including MS (petrol), HSD (diesel) and LPG, among others. The refinery’s product line will also include petrochemical products such as polypropylene.
Axis and ICICI do not have any obligation to fund the future equity requirements of the project beyond their initial seed capital contribution.
HDFC Life will subscribe to 11 percent of the total-paid up capital of the new entity, subscribing to 5,500 equity shares of face value Rs 10 each. This will be completed within six months from the date of the Joint Venture Agreement.
SBI Life will also own 10 percent stake in the target entity by subscription to 5,000 shares with a face value of Rs 10.
Shares of Chennai Petroleum are trading 1.1 percent higher at Rs 201.75.
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