BPCL mulls acquisition of SPIC Petrochem assets

31-Jan-08

Bharat Petroleum Corporation (BPCL) is considering a proposal to acquire the assets of SPIC Petrochemicals, a subsidiary of A C Muthiah-owned Southern Petrochemical Industries Corporation (SPIC). SPIC's greenfield project to manufacture purified terephthalic acid (PTA) and polyester filament yarn (PFY) at Kossapur, near Chennai, has been aborted due to financial problems. SPIC Petrochemicals got entangled into financial problems for its 315,000 tpa PTA and 80,000 tpa PFY projects, conceived almost a decade back. A few years back, Oil and Natural Gas Corporation (ONGC) was involved in a failed attempt to acquire SPIC Petrochemicals. SPIC Petrochemicals owes financial institutions and banks close to Rs 1,100 crore in dues. The company's woes started when Chennai Petroleum Corporation, which was to jointly set up a PTA/PFY project with SPIC, went to court against the Kossapur project. After the Madras high court passed an injunction on SPIC Petrochemicals' project, over Rs 900 crore got locked in the project. SPIC Petrochemicals' assets include 200 acre of land, which could be developed to extract a better realization.