The Hindu Business Line : EGM called to okay Kochi Refineries, BPCL swap ratio

THE Department of Company Affairs has convened an extraordinary general body meeting (EGM) of the shareholders and creditors of Kochi Refineries Ltd (KRL) and the Bharat Petroleum Corporation Ltd (BPCL) here on January 21 to get the swap ratio approved by the stakeholders.

The KRL-BPCL merger is the only issue to be discussed by the EGM, which would be presided over by Mr Justice (Retired) Santhosh Hegde. Hence, it would discuss the swap ratio of 2.25:1 (for nine KRL shares four BPCL shares) and then a voting would be held, Mr B.K. Menon, Managing Director, KRL told Business Line on Monday.

"In another two-three months time merger will be through," he said. The boards of the both KRL and BPCL had approved the swap ratio in February last and later by the Cabinet, he added.

According to Mr Menon valuation of the enterprises were done by reputed financial experts. Valuation of KRL was done by Raiji and Co, while that of BPCL by ICICI Securities Ltd. So as to make it foolproof and ensure a fair deal for the shareholders "Ernst & Young" was entrusted to do a final and overall valuation. Financial experts had recommended the 9:4 ratio, which would prove to be beneficial in the long term, he said.

Therefore, the apprehensions raised by some quarters based on the current decline in KRL share price at the stock exchange were unfounded, he said.

KRL share, which was ruling around Rs 250 before the merger announcement was traded at the BSE `A' Group on Monday at Rs 194.70.

KRL, he said, has a paid-up capital of Rs 138.47 crore of an authorised capital of Rs 150 crore. BPCL is the major shareholder with 54.81 per cent followed by LIC (8.51 per cent), Kerala Government (5.06 per cent), Corporate bodies (5.28 per cent), Other Insurance Companies and Foreign Institutional Investors (FIIs) (4.19 per cent each) and Mutual Funds (1.53 per cent). Less than one per cent is held by Balmer Lawrie & Co, UTI, nationalised and other banks, KSIDC, NRIs. The Indian public (70,000 shareholders) hold 15.19 per cent.

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