Slump in market forces Bharat Oman to defer IPO

Bharat Petroleum Corporation- (BPCL-) promoted Bharat Oman Refineries (BORL) has deferred plans to raise equity through initial public offering (IPO), the company has said in a press release.

BORL had filed a draft red herring prospectus with the Securities and Exchange Board of India in March 2008 to raise equity for a refinery project at Bina in Madhya Pradesh. However, due to the present market conditions, the company has decided to postponed the IPO.

BORL is constructing a grassroot petroleum refinery in Bina with around 6 million metric tonnes per annum capacity. The project will cost approximately Rs 10,400 crore.

Work on the project is according to the schedule and the refinery is expected to commence commercial operations by January 2010, the release added.

BPCL and Oman Oil Company are stakeholders in BORL. BORL has already entered into an agreement with a consortium of lenders for Rs 6,400 crore debt. BORL is also in discussions with private equity investors to generate funds. Suitable investments will be sought from these investors at a time that is beneficial for the project and until then BPCL would fund it.