No liability with Hindustan Corp: Qoro

July 25, 2009 07:44:25 AM

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Fijian Holdings Ltd is not expecting any liability to arise from its management MOU with India’s Hindustan Petroleum Corporation Ltd, following the termination of the much publicised proposal by FHL to purchase BP South West Pacific’s oil business in the Pacific.  

FHL managing director Sereana Qoro told Fiji Live the management understanding with Hindustan Petroleum was on the condition that the purchase was successful.

“The management contract was always with the condition that the purchase went ahead,” said Qoro.

“So everything was tied to the purchase. Now that it has been terminated, everything else, including the management contract with Hindustan Petroleum have been canceled. We are just happy that we managed to get back 100 percent of the initial deposit with BP SWP Ltd,” Qoro said.  

FHL yesterday announced the termination of the $190 million purchase and attributed the business decision to “delays beyond its control.”

Had the deal been clinched, the Fortune 500 Hindustan Petroleum Corporation would have been entitled to a 26 percent stake in the oil business as part of its contract, an opportunity that it was looking forward to in its bid to establish a presence in the Pacific region.

The canning of the FHL/BPSWP Ltd acquisition however is not expected to derail Hindustan Petroleum’s plans to pursue that goal, with a report last week from Wall Street Journal India stating that it was looking at acquiring most of the oil refining and distribution assets of Royal Dutch Shell Group in New Zealand.

Hindustan Petroleum has a turnover of over US$27.95 billion and commands a market share of 18 percent in petroleum products in India, 11 percent of 21 commercial airports and two defense bases.