Ipcl, Vinmar Ink Deal For Rs 316cr Unit

Indian Petrochemicals Corpo-ration (IPCL) has entered into a joint venture with Vinmar Petrochemicals - a part of the US-based Vinmar group - to set up a methylmethacrylate (MMA)/-polymethyl-methacrylate (PMMA) project. Estimated at Rs 316 crore, the unit will come up adjacent to IPCL's Gandhar complex. The joint venture company called Indian Petrovin Ltd will utilise the entire quantity of hydrocyanic acid (HCN), a by-product from IPCL's proposed acrylonitrile plant, to manufacture MMA and PMMA.

For the proposed project, the promoter's contribution towards equity has been frozen at Rs 130 crore. The project is funded with a debt:equity ratio of 1.5:1.

The corporation will seek shareholders approval at its forthcoming annual general meeting to invest Rs 65 crore in the equity share of the new joint venture company. As per the pre-feasibility study carried out by the corporation, it expects a return of 21 per cent on its investment.

Furthermore, it has sought consent for raising funds up to Rs 1,250 crore from the capital market. IPCL has already submitted an investment plan of Rs 6,000 crore for expansion and diversification projects at Nagothane and Gandhar complex.

The corporation cannot raise funds through equity as the government holding is expected to come down to 51.2 per cent after the conversion of the foreign currency convertible bonds.

It has also sought consent to raise its borrowing limit from Rs 1,200 crore to Rs 2,500 crore.