A source said Spic has agreed to pay Madras Refineries a total of Rs 27 crore, covering the later's investment of Rs 13 crore in Arochem over the years and Rs 14 crore towards interest on its investments in Arochem. It is said that Spic had agreed to compute interest at the prime lending rate prevailing in 1994 when Spic floated a separate company Spic Petrochemicals Company Ltd (SPC) to manufacture purified terepathalic acid (PTA) and polyester filament yarn (PFY).

The deal also enables Spic to gain control of Arochem land and 168 acres of land taken for SPC. The source said while about 100 acres of land will be retained for the Arochem project, thebalance of about 300 acres will be taken by the state government for other purposes.

Madras Refineries, it is said, has agreed to withdraw all court cases against Spic. After the deal gets cabinet clearance, Spic will move for the merger of SPC and Arochem. Meanwhile, Spic is also scouting for a joint venture partner for acquiring aromatics technology which is generally considered difficult to get.

The product mix in the merged entity will be the same viz. PFY, PTA and aromatics. Spic wants to go ahead with the PFY project first as it is almost ready for commissioning and has a capacity of 80,000 tonnes per annum.

Madras Refineries chairman may quit

Madras Refineries chairman and managing director V Shyam Sunder is reportedly quitting the public-sector undertaking for greener pastures. Going by reports, Shyam Sunder is likely to head another refinery project coming up in Tamil Nadu.

Sources said that Shyam Sunder is expected to join the Hyderabad-based Nagarjuna group which is putting up thePennar Refinery project in collaboration with the Tamil Nadu Industrial Development Corporation Ltd (Tidco).

The refinery will have a capacity to process crude of 5 million tonnes per annum. It is just over a year since Shyam Sunder took over the reins at Madrasd Refineries. Earlier he was Indian Oil Corporation regional director (south) where he had a long stint.