Nayara Energy gets ~4,016-cr term loan for petrochem biz

Nayara Energy on Thursday announced the financial closure of its Phase 1 petrochemical business expansion plan following a tie-up of a term loan of ~4,016 crore with a State Bank of India-led consortium.

The Russia’s Rosneftbacked company, in a statement, said the funds will be used to set up a 450,000 tonne per annum polypropylene plant at its Vadinar refinery in Gujarat.

“The financial closure brings to fruition our growth plans to become one of the largest integrated energy and petrochemicals complexes in the country. The demand for polypropylene is expected to grow at around 10 per cent per annum. The construction of the first phase of the petrochemicals project is expected to be completed in 2023,” said Alois Virag, chief executive officer, Nayara Energy.

The loan facility carries a tenor of over 15 years. The project is proposed to be funded with a mix of debt and equity, the statement said.

“The company is already in possession of required land and does not need to acquire fresh parcels for the project,” Nayara said.

Nayara Energy had announced its plans to expand into petrochemicals at the Vibrant Gujarat Summit in 2019.

In August 2017, Nayara Energy (then Essar Oil) was acquired by Rosneft and an investment consortium comprising global commodity trading firm Trafigura and UCP Investment Group.

The company owns and operates India’s secondlargest single-site refinery at Gujarat’s Vadinar with a current capacity of 20 million tonne per annum. Nayara Energy’s fuel retail network consists of more than 6,000 outlets across the country.