BPCL shelves IPO plans for its subsidiary

State-owned Bharat Petroleum Corporation (BPCL) today said it has deferred plans for an initial public offering (IPO) for its subsidiary that is building a grassroot refinery at Bina in Madhya Pradesh.

Bharat Oman Refineries' (BORL) had filed the draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi) on March 28, 2008 to raise equity for the refinery project.

"However, taking into consideration the current volatile market conditions, the Board in its meeting held on February 26, after consulting its merchant bankers, decided to suspend the IPO plan for the time being," the company said in a statement here.

BORL is building the Rs 10,400-crore, 6 million-tonne-a-year refinery at Bina. "Work on the project is as per schedule and the refinery is expected to commence commercial operations around January 2010," it said. "BORL may consider filing a new DRHP in future when the market conditions improve."

At present, BPCL and Oman Oil Company are the shareholders of BORL. The project is funded with a mix of debt and equity and BORL has already entered into an agreement with a consortium of lenders for the debt component of Rs 6,400 crore.