Mittal’s stake in HPCL cleared

India has increased the foreign direct investment (FDI) limit in state-owned oil refining companies from the existing 26% to 49%, paving the way for steel baron L.N. Mittal to acquire a 49% equity in Hindustan Petroleum Corporation Ltd.s refinery at Bhatinda. The Punjab government had approached the Union government to increase the FDI limit after the Luxembourg-based Mittal Investments signed an agreement with HPCL last year to become an equal partner in the Rs16,000 crores (US$3.93 billion) refinery. Mittal will invest Rs3,300 crores (US$811.80 million) in the venture and will hold a 49% stake in the special purpose vehicle set up for building the plant and laying a 1,100-km pipeline for bringing crude oil from Mundra port to the refinery. HPCL will hold the remaining 49% equity in the 9-million-ton refinery, while financial institutions will have a 2% stake in the project. The refinery project, which was originally to be commissioned in 2003, will be completed by September 2010. (May 8, 2007)