The Hindu Business Line : BPCL-Kochi Refineries swap ratio

MR Dinesh Trivedi, a member of the Rajya Sabha belonging to Trinamool Congress, has urged the Chairman of the Standing Committee on Public Sector Undertakings (SCOPE) to re-assess the announced swap ratio of 9:4 for the merger of Kochi Refineries Ltd (KRL) with Bharat Petroleum Corporation Ltd (BPCL).

The plea is based on the premise that the interests of the minority shareholders of KRL have been ignored while working out this swap ratio.

A letter written by Mr Trivedi has proposed a new swap ratio of 3:2 after studying the financial performances of both KRL and BPCL. In fact, this is just one of the four alternatives suggested by him.

As a second alternative, he has suggested that BPCL should go for a buy-back of KRL shares from the minority shareholders as per the SEBI takeover code. In an effort to protect the interests of the minority shareholders of KRL, Mr Trivedi further has proposed that KRL's board of directors should recommend a "hefty interim dividend" so that the "minority shareholders are compensated to some extent".

He has also suggested that the merger may be deferred till such time the pricing policies of the Government in respect of oil marketing companies are revised - so that a fair valuation can be worked out.

Mr Trivedi, it may be mentioned, is a member of the Board of Trustees of National Investors Foundation. The letter to SCOPE underscores the fact the price of KRL on the bourses had dropped by almost 16 per cent (since the announcement of the swap ratio on January 18), while that of BPCL had crept up by two per cent.

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