ONGC to acquire stake in SPIC Petro?

21-Apr-06

Despite news reports to the contrary, SPIC Ltd. is hopeful that the acquisition of SPIC Petrochemical by ONGC is to be completed soon- probably one month's time. Due diligence has been completed by the consultants appointed by ONGC. Following an advice from the Petroleum Ministry, ONGC had taken interest in the project. Ernst & Young was appointed as the lead advisor for the proposed acquisition. Engineers India Ltd (EIL) and Amarchand & Mangaldas, a law firm, were appointed as technical and legal consultants. The consultants submitted their reports in February-March this year. SPIC Petrochemicals had planned to set up a purified terephthalic acid (PTA) and polyester filament yarn (PFY) facility at Manali in Chennai. When the Madras High Court passed an injunction in October 1997, funds worth Rs 946 crore were locked up in the project. Of this, SPIC's contribution was Rs 252 crore. At that stage, the PFY plant was more than 80% complete, or about 12 months from going on stream. The PTA plant had progressed to the extent of 11% and was nearly two years away from completion.