The Cabinet Committee on Economic Affairs has formally approved NRI steel magnate Lakshmi Mittalís bid to acquire 49% of the stocks of Hindustan Petroleum Corporationís Bhatinda refinery.
The large-scale refinery with a capacity to process 9 million
tones of crude a year will sell its stake for Rs.3, 365 crore
to Mittal Energy Investments Pte Ltd headquartered in Singapore .
The company is a wholly owned subsidiary of Mittal Investments
based in Luxembourg.
FEMA laws restrict FDI in the petroleum refining sector to 26%,
and Mittalís offer to HPCL had to be put up to the Union Cabinet for a special approval. While retaining a 49% stake in the refinery, HPCL intends to shift the remaining 2% to financial institutions.
The Rs.3, 365 crore buyout signals the biggest foreign direct
investment in the petroleum refining sector. The Bhatinda refinery
will commence processing from September 2010