Bharat Oman Refineries (BORL) has filed a DRHP with SEBI
Bharat Oman Refineries (BORL) has filed a draft red herring prospectus with the Securities and Exchange Board of India on March 28, 2008 for its initial public offering (IPO). BORL intends to raise approximately Rs 3850 crore as the equity contribution for a refinery project at Bina. BORL is promoted by Bharat Petroleum Corporation (BPCL), a fortune Global 500 Company, with interests in downstream oil refining and marketing of petroleum products.
When I was watching the interview of BORL one of the top management personnel, he looked pretty confident in bringing this IPO in market even though people are pulling out their IPOs from market. The major reason for BORL to bring this IPO in the market is – they are in the process of constructing a grassroots petroleum refinery in Bina in the state of Madhya Pradesh, at an approximate capital cost of Rs 10400 crore. The project is intended to he funded with a mix of debt and equity in the ratio of 1.6:1. BORL has entered into an agreement with a consortium of lenders that provides for the debt component of approximately Rs 6400 crore.
BORL has entered into an off-take agreement with BPCL pursuant to which BPCL has agreed to purchase substantially all of the refinery’s petroleum products. BPCL intends to construct a marketing terminal at Bina and a pipeline connecting the marketing terminal to its existing product pipeline to enable it to transport a portion of refinery’s petroleum products through its existing distribution channels. BORL will draw upon BPCL’s project execution skills to help BORL to complete the project on schedule. BORL expects to realize significant operational synergies with BPCL, including with respect to crude sourcing, operations and maintenance, marketing of petroleum products and sharing of petroleum-related infrastructure.
The Government of Madhya Pradesh has granted several financial benefits and fiscal concessions to BORL in connection with the construction and operation of the refinery.
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