By IANS,
New Delhi : State-owned Oil and Natural Gas Corp (ONGC) has decided to withdraw its stake from Kakinada Refinery and Petrochemicals (KRPL) in Andhra Pradesh, paving the way for construction major GMR to acquire the plant.
The company said Monday evening after the final KRPL board meeting that the decision was taken after it found the project non-profitable.
The KRPL project constitutes a 15 million tonne per annum refinery and a 450,000 tonne per annum petrochemical plant.
Mangalore Refinery and Petrochemicals (MRPL), a subsidiary of ONGC, holds 46 percent stake in KRPL and infrastructure-financing firm IL&FS holds 51 percent while the remaining stake is held by Kakinada Seaports.
Sources close to the development said GMR will buy out ONGC’s total 46 percent stake and five percent from other holders. As a result, the construction company will have 51 percent stake while IL&FS and the Kakinada Seaports will hold 46 percent and the rest will go to Andhra Pradesh Industrial Infrastructure Corp (APIIC).
However, GMR officials when contacted said the company has not yet received any official communication from ONGC.
Earlier, ONGC had asked the Andhra Pradesh government for fiscal benefits worth Rs.160 billion ($4 billion) for eight years. However the state government refused. Eventually ONGC decided to sell its stake.