CPCL, IOCL signs JV agreement for Rs 315.80 billion Tamil Nadu refinery

Chennai Petroleum Corporation Limited (CPCL), Indian Oil Corporation Limited (IOCL) and seed equity partners have signed a joint venture (JV) agreement for the upcoming 9 million tonne per annum (mtpa) refinery and petrochemicals project at Nagapattinam, Tamil Nadu. The project is expected to see an investment of Rs 315.80 billion. IOCL and CPCL will together hold 50 per cent of equity stake (25 per cent each) in the JV, with the remaining 50 per cent stake being held by financial and strategic investors, to be identified at a later stage. The refinery complex will cater to the demand for petroleum products in the southern region of India, and provide impetus for economic development of the region. The project will provide substantial socio-economic benefits to the country in general, and to the state of Tamil Nadu in particular. In addition, Axis Bank has entered into an agreement for an initial in­vestment in the seed equity capital of the proposed JV. After this in­vest­ment, Axis Bank will hold 10 per cent shareholding in the target entity through the acquisition of 5,000 equity shares with a face value of Rs 10 each. Including the stake acquired by Axis Bank, around 60 per cent of the equity will be owned by these three entities, with the rest of the stake being held by other partners.