The total investment by the Tatas is expected to be around Rs 350 crore. Both the companies have signed an investor agreement recently.
According to the agreement, the Tatas will take 26% stake in Nagarjuna Oil Corporation (the company, which is implementing the refinery project) while Nagarjuna Fertilizers and Chemicals (NFCL) will retain its 51% share, M Ramakanth, company secretary, NFCL said confirming the development.
The other partners in the project include Sunterra with 10% and the remaining 13% is shared between TIDCO, EXIM and Udhe, GmbH, of Germany, he added. The project has an equity base of Rs 1,400 crore.
Originally, the project was conceived by the Pennar Group, over seven years back, it failed take off for various reasons.
Later the project was taken over by the Nagarjuna Group four years back. It unsuccessfully tried to revive the project by tying up with some Gulf-based companies and later with Indian Oil Corporation.
Now that we have tied up the equity portion, we are focusing to arrange the debt component, Ramakanth said. In the next two month the company will be in a position to announce the financial closure, he added.
Post financial closure the project, which will have an installed capacity of six million tonne, will require about 30 months to commence commercial operations.