NOCL is currently implementing a 6-million metric tonnes per annum (MMTPA) petroleum oil refinery project on the south-east coast of India at Cuddalore, around 200 km south of Chennai.
The project had been partially completed in December 2011 when a cyclone and shortage of funds stopped work. With the fund infusion, the refinery can start production in two-three years after completing the balance work.
The plant is capable of meeting Euro VI requirements with some additions.
Most of the statutory clearances for the refinery are in place, with a few requiring renewal. Land is also available for expansion up to 30 MMTPA. VAT benefit in the form of structural financial assistance is also available, said the IRP.
Since 2012, NOCL has been looking for a strategic investor to pump in fresh equity and revive the project.
While NOCL's management was not available for comment immediately, insiders say that to commence the project, the company would require around Rs 14,000-15,000 crore, including debt and principal amount.
Around 15 lenders had invested in the project. Subsequently, the banks sought the Reserve Bank of India's dispensation in view of the assets being likely to be classified by the central bank as non-performing assets (NPAs).
The IBC gives 180 days for a resolution and a one-time extension of 90 days. After this, the NCLT can appoint a liquidator to wind up the company. As the lenders and creditors don't want to wind up the company, since they will end up losing a lot of money, they are also keen on reviving the project by bringing in investors.
A few strategic investors, mainly from overseas, have shown interest in backing the project, said a senior company official on the condition of anonymity.
"We have got some proposals from a few strategic investors, who are mostly outside India," added the official.
The company has been looking actively for an investor. Last year, Nagaruja Oil Refinery Ltd (NORL) got its board's approval to dilute 46.78 per cent in NOCL, a company set up by NORL.
Earlier, Singapore-based Netoil had shown interest in investing in the project and agreed to infuse Rs 3,600 crore. Then it was reported that Indian Oil Corporation was planning to take over the refinery. However, neither of the two plans took off.
Sources in the company said that it needs about Rs 4,000 crore equity so that around Rs 8,000 crore of debt, including the principal, can be raised to revive the project. The project was delayed due to damages caused by a cyclone some years back and also hit by the global economic slowdown later.
The sources said that if the debt is not included, the company needs only around Rs 1,000 crore to revive the project. "We don't have any problem except money, and once the money is in, the project can be completed and commissioned in 18 months," said the above official.
For now, the total money required is around Rs 14,000-15,000 crore, excluding the money spent so far, to commission the project, including the settlement with the banks. The company may have to prepare itself for Euro VI, which will come into effect in India by the time that the refinery would be ready. That would require an additional investment of Rs 1,000 crore, which the company has to factor in now.