Opal In Talks With Local And Overseas Petrochemical Companies To Sell 25% Stake

OPaL in talks with local and overseas petrochemical companies to sell 25% stake

27-Jun-16

ONGC Petro additions Ltd (OPaL) is in talks with local and overseas petrochemical companies to sell as much as 25% in the company, three Oil and Natural Gas Corp. Ltd (ONGC) officials familiar with the development said. The company is jointly owned by ONGC, GAIL (India) Ltd and Gujarat State Petroleum Corp. Ltd (GSPC). ONGC and GAIL hold 44% each in OPaL, and GSPC holds the rest.
ONGC also plans to sell shares to the public OPaL in a few years from now. Post the stake sale and the listing, ONGC said the envisaged equity structure would be: ONGC (26%), GAIL (15.5%), GSPC (0.5%), other public sector companies (8%), strategic investor 25%, and public shareholding (25%).

“We are in discussions with PSU (public sector undertaking) players as well as petrochemical players in the Middle East for taking up to a 25% stake in the project,” said one of the three ONGC officials cited above. “OPaL is looking for a strategic investor for a portion of the balance untied equity who could bring value to the project,” said an ONGC spokesperson, in reply to an email. The US$4.5 bln mega petrochemical project is located at Dahej, Gujarat. The company has in the past held talks with several foreign firms for a stake sale but talks were stuck due to several delays in the project. The project was to be commissioned in 2011. The project has been delayed, leading to cost overruns. The plant was initially estimated to cost Rs.12,440 crore, but since then the cost has gone up to Rs.27,011 crore so far. OPaL is also in talks with private equity firms to offload stake in the company.
“They had met investment banks a month back as they are looking to raise nearly Rs.250-300 crore by selling stake to a private equity fund,” said a person who had met ONGC officials to seek a mandate for the process.