GMR enters into share subscription agreement

Bangalore-based GMR Infrastructure today said its arm GMR SEZ & Port Holdings Pvt Ltd had entered into a share subscription agreement to subscribe to 51 per cent in Kakinada SEZ Pvt Ltd. No financial details were disclosed by GMR.

The company entered into the project in June 2008 after state-owned Oil and Natural Gas Corporation (ONGC) and its subsidiary Mangalore Refinery and Petrochemicals (MRPL) decided not to join the refinery and special economic zone (SEZ) project.

The step is largely seen as an effort by the infrastructure company to enter into high growth segment of oil, gas and refinery.

“Though we entered into an agreement to hold 51 per cent stake in the Kakinada SEZ in 2008, this is just a formal announcement as per the guidelines of the Securities and Exchange Board of India,” a top official at GMR Infrastructure said. He said the company had no immediate plans to rope any strategic investor into the SEZ project.

According to earlier reports, the SEZ was envisaged as a 7.5-million tonne per annum refinery, which was later found not feasible. The consortium then decided to double the capacity to 15 million tonnes, with cost escalating to as high as Rs 25,000 crore. “This was one of the reasons for ONGC to exit this project,” an industry observer noted.