Page 54 - Plastics News July 2019

BusiNess News

ONGC may buy CCDs of its unit Indian Oil lines up projects in

Tamil Nadu totalling Rs 8,520
il and Natural Gas Corp. Ltd (ONGC) may buy Rs 5,615
Ocrore worth of compulsorily convertible debentures crore
(CCDs) of ONGC Petro additions Ltd (OPaL) after failing to
find an equity investor for its petrochemicals arm, according ndian Oil Corporation Limited (IOCL) has undertaken
to reports. The planned tranche of CCDs issued in 2016 is Ivarious projects in Tamil Nadu entailing investments
part of a Rs 7,286-crore CCD programme of OPal, a joint worth Rs 8,520 crore, which include setting up
venture between ONGC (49.4%), GAIL (India) Ltd (49.2%), of an exclusive jetty, laying of a new 1,250 kms
and Gujarat State Petroleum Corp. Ltd (1.4%). OPaL used pipeline. IndianOil Executive Director, Tamil Nadu
the proceeds to partially finance project expenditures and Puducherry, P Jayadevan said that IOCL has
and repay loans. CCDs are financial instruments that have commissioned a Rs 90 crore LPG bottling plant in
the feature of compulsory conversion into equity as per Salem, and around 6,000 metric tonnes of storage is
being added in bottling plants in Ennore, Puducherry,
Tiruchirapalli, Madurai and Erode. The total value of the
projects in the bottling plants is around Rs 260 crore.
He added that IOCL would convert the booster station
on the Chennai-Tiruchirapalli-Madurai pipeline into a
full-fledged terminal. Further, he informed that a new
terminal at Asanur (in Villupuram district) was being
set up at a cost of Rs 470 crore and 75 acres of land has
been taken over from the Tamil Nadu Small Industries
Development Corporation. The terminal was expected
to be commissioned by June 2021. The company was in
terms and are treated as quasi-equity. The CCDs have an the process of setting up a new grass root terminal at
unconditional and irrevocable mandatory put option on Vallur near Ennore Port at an estimated cost of Rs 700
OPaL’s sponsors, ONGC, for the buy-out of the CCDs at the crore. This terminal, would receive products from the
end of the 35th month from the deemed date of allotment, refinery owned by group company Chennai Petroleum
as well as the undertaking to fund the coupon payment, Corporation and Ennore Port and serve Chennai and
according to the terms of issuance. The sponsor would nearby markets. “Considering the increase in demand
also have the right to buy out the CCDs at the end of the for LPG and petroleum products, there was a strong
24th, 30th, and 35th months from the deemed date of need for an own captive jetty at Kamarajar Port as
allotment, according to corporate filings. The CCDs have
a tenor of 36 months from the deemed date of allotment
and do not have any conversion option for the period it is
held. The report also suggests that the ONGC board could,
however, also consider extending the tenor of the CCDs.
Quoting the source, “Extending the tenor of the CCDs is
also being deliberated upon. In case it is not approved by
the board, ONGC may have to exercise the put option.
CCDs will allow OPaL to maintain status quo on its equity
structure and equity investor process induction process there was heavy congestion and longer detention of
bringing in an investor by selling stake in the company tanker vessels. As part of tapping renewable energy,
will smoothen." For more than three years, ONGC has IOCL has undertaken solarization exercise of 876 retail
maintained that it is in talks with interested potential outlets as on June 2019, of which 221 were in rural
petrochemical companies to sell a 25% stake in OPaL. The areas. IOCL is committed to renewable energy solution
process has, however, faced unexplained delays. to protect the environment and further targets to
solarise 450 outlets in 2019-20", he said.

54
Plastics News July 2019 56