The Foreign Investment Promotion Board (FIPB) has recommended the proposal of Cals Refineries Ltd for Foreign Direct Investment worth Rs 1425 crore for the consideration of the Cabinet Committee on Economic Affairs (CCEA).
This follows a FIPB meeting on May 20, a Finance Ministry statement said on Tuesday. The proposal was recommended for CCEA's consideration as the investment involved is more than Rs 1,200 crore, it added.
Cals Refineries' proposal was to issue equity shares in the form Global Depository Receipts (GDRs) against supply of refinery equipment. The company had proposed FDI of Rs 1,425 crore against import of second hand machinery, the statement said.
Mr D. Sundararajan, Managing Director of Cals Refineries, told
Cals Refineries and the Hardt Group in March reached a definitive agreement for Cals to acquire the Cenco and Atas refinery assets owned by affiliates of Hardt and currently located in the US and the Turkish Republic of Northern Cyprus.
Under the terms of the transaction, Cals will pay Hardt $417 million in total consideration, with $317 million paid in the form of GDR in Cals and the balance in cash.
Hardt has also agreed to subscribe for certain equity shares of Cals on a preferential allotment basis, subject to shareholder and customary approvals, in an amount of up to $7 million in one or more tranches and to nominate two directors to the Board of Cals.
Other proposals
Meanwhile, the statement said 16 FDI proposals worth Rs 923.55 crore was cleared by the Government based on the FIPB's recommendation.
This included the proposal of Andhra Pradesh-based Soma Tollways Pvt Ltd to induct foreign investment of Rs 500 crore in an investing company.
The other was a proposal for FDI worth Rs 400 crore from L&T Finance Holdings Ltd. The company had sought permission for pre-IPO placement of equity shares with eligible non-resident investors.
Among those cleared included the proposal of Star News Broadcasting Ltd (Touch Tele Content (I) Ltd.). The company provides support services to other media companies and to create, own and distribute non news and current affairs television channels. However, there is no fresh FDI inflow.
Of the 38 FDI proposals taken up by the FIPB, 14 were deferred and seven were rejected.
FIPB cleared proposal by Centum Electronics Ltd (Bangalore), Park Controls & Communications Ltd (Bangalore) and Global Gourmet (Gujarat).
But it deferred the proposal of Indian Rotorcraft (Mumbai) for induction of foreign equity to carry out the business of final assembly of military and civil versions of helicopters. It also deferred the proposal of Precision Electronics to undertake the additional activity in the defence sector.
Among those deferred were proposals of BNP Paribas SA (Paris) to set up a WoS to act as an investing company and Natixis Global Asset Management (France) to invest by way of indirect foreign investment in pension fund subsidiary.
Three proposals for FDI from Bangladesh were deferred including that of Pran Beverages and Southern CNG Automobiles.
The proposals that were rejected include those of AOS Holding India SAS France to set up a joint venture company to undertake the business of real estate agents, brokers and managers.