Adani has appointed Morgan Stanley to advise on the possible sale of a stake in its Abbot Point coal port in Australia, as it looks to raise funds to help finance a A$7 billion ($6.2 billion) mine, rail and port project. Adani spokesman Andrew Porter confirmed the company has hired Morgan Stanley to help it on a potential partial sale of Abbot Point, a 50 million tonnes-a-year coal terminal on the east coast of Australia that it bought for $2 billion in 2011. Funds raised from the stake sale would be used to help finance Adani's planned expansion of the port, Porter said. Earlier this year, Morgan Stanley advised the Australian state of New South Wales on the sale of the Port of Newcastle, the world's largest coal export terminal, which fetched A$1.75 billion, double the amount that had been widely expected. Adani's comments came after the Wall Street Journal reported that while Morgan Stanley was advising on the port sale, the bank was among four major U.S. investment banks that had told a U.S.-based green group, Rainforest Action Network, that they would not help fund the port's expansion. The east coast port expansion to handle two rival coal projects planned by Adani and India's GVK with Australian billionaire Gina Rinehart has sparked an outcry from green groups and tourist operators opposed to coal projects and port dredging near the World Heritage-listed Great Barrier Reef. The $17 billion worth of projects in the undeveloped Galilee Basin have been at the centre of a campaign by anti-coal activists pressing institutional investors and big banks to shun coal investments to help combat climate change. "Stopping Abbot Point is a top priority for us, because this single project is the key to whether one of the largest stores of carbon on the planet, the Galilee Basin, stays in the ground where it belongs, or is sold on the global market and released into our atmosphere," said Amanda Starbuck, a director at San Francisco-based Rainforest Action Network. Morgan Stanley said on Tuesday it was not necessarily opposed to the Abbot Point expansion, but it typically does not provide financing for any projects in Australia. "In the case of the various Galilee Basin coal, rail and port developments, we have not looked at these projects in any detail nor have we assessed or opined on the environmental considerations surrounding them," Morgan Stanley's Australian spokesman Hugh Fraser said. "We are simply not in the business of providing greenfield project financing in Australia and therefore, as we have stated, we will not lend to, or invest in, these projects." Adani is expected to tap Australia's big four banks and others to help fund its Carmichael project in Queensland state, which most analysts say would be hard to justify at current coal prices, hovering at five-year lows. (Reuters)
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For oil marketing company (OMC) Hindustan Petroleum Corporation (HPCL), 2013-14 was a landmark year. First, Nishi Vasudeva took over as chairperson and managing director of the four-decade-old company, thus becoming the first woman executive in India to head a Navratna public sector undertaking (PSU). Second, it trumped other PSU OMCs in sales growth and recorded the highest level of net profit in the past decade. This helped HPCL retain its sixth position in the BW Real 500 rankings for 2014.The company’s total income rose 8.32 per cent over the previous year to Rs 2,35,599.16 crore while operating profits jumped 41.33 per cent to Rs 6,705.26 crore. Profit after tax (PAT) nearly doubled to Rs 1,080 crore in FY 2014, from Rs 501 crore in FY 2013. The company clocked all-time high sales of 31 million tonnes (mt) for petroleum products, with a growth of 4.1 per cent over the previous year — the highest among OMCs. This growth is noteworthy considering that consumption of petroleum products in India crawled upwards by 1.3 per cent to touch 160 million metric tonnes (mmt) in 2013-14. “This robust performance is due to consistent implementation of best practices in operations, institutionalisation of strategic initiatives and enhanced employee engagement,” Vasudeva said in her maiden address to HPCL shareholders in September. In 2010, HPCL launched its short-term growth plan, Target Shikhar, focused on improving refining profitability, investments in new areas and operational efficiency. Implementation of the plan has helped the company post better results ever since. The key drivers of HPCL’s growth in 2013-14 were timely recoveries from the government and better refining and marketing margins. The company’s pipeline throughput rose to 15.69 mt in 2013-14 from 14.04 mt the year before. Industry observers say HPCL’s gross refining margin (GRM) and capacity utilisation were better than the expected under-$3 a barrel. HPCL’s uncovered losses on selling diesel and cooking gas dropped to Rs 482 crore on account of a Rs 15,215-crore cash subsidy from the government and Rs 16,771 crore in assistance from upstream firms. The government’s decision in January 2013 to allow OMCs to periodically hike diesel prices by 50 paise every month also helped. An appreciating rupee and consistent diesel hikes enabled HPCL pare diesel losses from Rs 8 a litre in January to Rs 2.8 a litre by the end of the financial year. Vasudeva says the company is working on Udaan 2030, a long-term plan focused on cost optimisation and maximising profitability. In this connection, it is implementing two strategic initiatives for central procurement and margin management by integrating end-to-end processes across crude sourcing, refining, storage, distribution and marketing operations.To stem the imbalance between sales and refining capacity and bring newer refineries into action, HPCL is ramping up the capacity of its Visakhapatnam refinery from 8.3 mmt per annum to 15 mmtpa. It is planning to increase the capacity of its Mumbai refinery from 6.5 mmtpa to 10 mmtpa. HPCL is also collaborating with the Rajasthan government to set up a 9 mmtpa refinery-cum-petrochemical complex.The company ventured into international exploration and production (E&P) of petroleum products through its subsidiary, Prize Petroleum, which has acquired a 21 per cent participating interest in two E&P blocks in Australia. Vasudeva says HPCL will focus on strengthening its existing businesses, while leveraging opportunities in E&P and natural gas and diversifying into petrochemicals. Considering its good run and the government’s supportive policies, HPCL may have already taken off on its Udaan 2030 mission.(This story was published in BW | Businessworld Issue Dated 17-11-2014)
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