Jatiyas Entering Lpg Business With Dynegy

The Jatiyas of Wimco are foraying into the LPG business through a memorandum of understanding with a Fortune 500 US-based company Dynegy.

Under the terms of the agreement reached between the two sides, an LPG import terminal will be set up at Okha in Gujarat.

Apart this, other foreign investors and non-resident Indians too will pick up a stake in the project.

A number of LPG bottling plants too will be set up in the state. The cost of the project has been estimated at Rs 1,000 crore.

SBI Capital Markets the investment banking arm of State Bank of India, is the sole financial advisor and arranger for the project.

 

A new company christened Wimco Petrogas has already been incorporated for the LPG project.

Confirming the move, a consultant to Wimco Petrogas said, "This is one of the biggest projects of its kind in the world. A final decision on the number of bottling plants to be set up is yet to be taken."

The consultant also said that the stake in Wimco Petrogas will be picked up by the Jatiya family and not Wimco, the company promoted by them Wimco. Wimco manufactures the ship brand of match boxes in India.

The exact equity contribution of each party in the project is yet to be finalised, according to industry sources.

Many companies which had earlier put their LPG business plans in the

backburner are now reviving these plans.

New entrants too are entering the fray. This has been prompted by the Union government's decision to allow LPG as a fuel for automobiles.

The Texas-based Dynegy is one of the leading providers of energy products and services in North America and Europe.

It is a wholesale marketer of natural gas, electricity, coal, emissions, natural gas liquids, crude oil, LPG, and related services.

The company is also a power producer and owns plants with an aggregate capacity of 12,000 mw.

The company recently completed its merger with Illinova Corporation, the parent company of Illinois Power.

The merged entity has targeted $20 billion as revenues in the current year.