New Delhi: The Union Cabinet on Thursday allowed NRI steel baron Lakshmi N Mittal to pick up 49 per cent stake in state-run Hindustan Petroleum Corp's Bhatinda refinery.
Mittal Investments plans to acquire the stake in the 9 million tonnes per year refinery for Rs 3,365 crore through its 100 per cent arm, Mittal Energy Investments Pte Ltd, incorporated in Singapore.
The Cabinet approval was required since current government policy restricts foreign direct investment in public-sector petroleum refineries to up to 26 per cent. HPCL will hold 49 per cent stake in the Rs 17,973-crore project, while the balance two per cent would be allocated to financial institutions.
The Cabinet approval, on a proposal by Petroleum Ministry, is specific only to Mittal Energy Investment Pte Ltd, a wholly-owned subsidiary of Mittal Investments Sarl, Luxembourg and the policy restricting foreign direct investment to 26 per cent will remain.
"This joint venture will be the largest FDI in PSU refining sector. This will enhance availability of petroleum products in the north," Information and Broadcasting Minister PR Dasmunsi told reporters after the Cabinet meeting here.
The Cabinet has also allowed HPCL to make its investment of 49 per cent in the JV, he said. This approval to HPCL was needed as the current policy restricts public sector holding in such projects to 26 per cent and makes it mandatory for the balance 48 per cent to be offered to public.
HPCL and Mittal have already signed an agreement for the nine million tonnes refinery in Punjab.
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