Clarification to a news article that appeared in one of the Financial dailies on March 15, 2004
March 16, 2004
Clarification:
ABB will continue to be actively associated with the Essar Oil refinery project. Essar Oil may also bring in other additional contractors to supplement/complement ABB's role for completion of the project.
As per the CDR package, the promoters alongwith their associates are committed to bring in the entire equity required for completion of the project and this position remains unchanged.
The plans to complete the refinery in the next 18-24 months as envisaged in the CDR package also remains unchanged.
The company has received formal sanction of the lenders for the remaining amount for completion of the project and the company is presently in the process of complying with these formalities.
Background note on Essar Oil Refinery for reference
In a bid to physically restart work on its 12 mmtpa refinery project, Essar Oil has begun to mobilise the necessary equipment and men at its site at Vadinar, District Jamnagar. EOL is in talks with vendors and suppliers who are associated with the project and is in the process of completing the necessary documentation. Essar Oil is currently implementing a 12 million tpa refinery project (post de-bottlenecking) at Vadinar in Gujarat. The project cost of Rs. 9863 cr. (excluding funded interest term loan) is funded through a debt-equity of 2.26. The plant is so designed as to maximise middle distillates which has great demand in Indian market.
EOL has completed 64 percent of the work on the refinery and has already incurred Rs. 6300 cr. (Including the terminal) till date. All the major plant and machinery valued at USD 430 million have arrived on the site and another USD 200 million worth of equipment are ready for shipment. The project is ideally located on the west coast of India at Vadinar with natural deep draft suitable for berthing very large crude carriers (VLCC) and is closer to the source of crude supply. The state of the art technology permits the flexibility to handle diverse crude for processing.
The entire equity and debt for the project is tied up. The Company has recently achieved full financial closure. The Company is in the process of completing its balance work within 18 - 24 months. This project will be India's 2nd largest green-field refinery after RPL which has commissioned its 27 MTPA refinery. The project has significant advantage by virtue of the Port in Vadinar which is a deep water all weather port.
Recently, the Company has entered bulk retailing of petroleum products with a plan to set up 2500 retail outlets of which thirteen are fully operational in Maharashtra/Gujarat/Punjab.
Media contact:
Corporate Communications:
Essar House, 11 K.K.Marg, Mahalaxmi, Mumbai 400034, India
CORPORATE
