Hindujas Seek Bechtel Stake In Orissa Project

The Hinduja group has asked US engineering consultancy major Bechtel to pick up a stake in the special fuel refinery it proposes to set up in Orissa. Bechtel, which is the engineering consultant to the Rs 1,700 crore project, is however yet to take a decision on the issue.

The financial closure for the project is expected to be completed by October, said K N Venkatasubramaniam, vice-chairman and managing director of Gulf Oil India, while speaking to Business Standard.

While Japanese major Sumitomo Corporation is to pick up a 25 per cent stake in the venture, the Hinduja group through its various companies like Gulf Oil, Ashok Leyland and others, will hold around 51 per cent. Bechtel could pick up a small stake while the balance will be held by the public. Venkatasubramaniam felt that the Orissa government may also pick up a minor stake.

The project is expected to be funded through a 2:1 debt equity ratio. The company proposes to raise the public contribution in January, 1998, Venkatasubramaniam said.

The group had originally planned for a fuel oil refinery, but subsequently opted for the special fuel refinery. This was done as the yield in case of a special fuel refinery was $250 per tonne as opposed to a yield of $120 per tonne in case of a fuel oil refinery.