Tata to acquire stake in Nagarjuna

The Tata group is understood to be close to buying a 26% stake in the Nagarjuna Oil Corp.’s oil refinery project for about Rs4 billion (US$89 million). The 6-million-ton-per-annum refinery is being built in Cuddalore, Tamil Nadu. Nagarjuna, which is a subsidiary of Nagarjuna Fertilisers and Chemicals (NFCL), will hold a majority stake of 51% in the project. The group is also in talks with some Russian and Middle East companies for funding the remaining equity portion of the project. The refinery was initially scheduled to go on stream in 2002, but has not yet taken off due to problems in raising funds. The project is now expected to go on stream 33 months from the date of financial closure. Moreover, the promoters are planning to integrate the first and second phases of the project, which would increase the project cost to nearly Rs50 billion (US$1.1 billion). (December 5, 2006)