After making a fortune in the liquor business in Russia, the Khemkas-owned Sun Group is entering the Indian petroleum sector.
The group's Cyprus-based Sun Petroleum is picking up a 41 per cent stake in the Hindustan Petroleum Corporation (HPCL)-promoted Prize Petroleum.
The 41 per cent stake will come to the Khemkas at a face value of Rs 50 crore (Rs 500 million). On being contacted, the Sun Group declined to comment on the premium at which the stake would be bought and said negotiations were under way.
"We are interested in getting into the oil and gas business," a senior Sun group executive said.
Company sources said the group had also bid for oil blocks offered under the New Exploration and Licensing Policy in partnership with Russian company Itera.
Itera International is one of the largest independent producers and traders of natural gas operating in the Confederation of Independent States and the Baltic states.
HPCL, which holds 50 per cent equity in Prize, will be putting another Rs 50 crore in the company. Prize has equity of Rs 720 crore (Rs 7.20 billion) of which the paid-up equity is only Rs 20 crore (Rs 200 million) and HPCL has subscribed to Rs 10 crore (Rs 100 million).
Prize was set up by the government as a joint exploration company for the public sector oil companies, but it remained a non-government company with 50 per cent of its ownership in the private sector.
