Cabinet Approves Largest FDI in PSU 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 Mittal’s 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