The Hindu Business Line : Maharashtra Polybutenes poised to change hands

Maharashtra Polybutenes, an erstwhile GP Goenka-controlled Duncan group company, is poised to change hands and restart operations at its Vasi plant from July 20 next after remaining closed since April 2004. Through a modified rehabilitation scheme, the process of changeover of management control is on.

According to BIFR sources, the management changeover process has been duly approved at the annual general meeting on June 30. Appointment of Mr Brijmohan Rathi, the new investor, as the Executive Director of the company, was approved by the shareholders, including two GP Goenka outfits — ISG Traders and Silent Valley Investments. The progress of the new arrangement would be reviewed by the BIFR on July 18, sources confirmed.

The new plan

Under the plan, new investors have already pumped in around Rs 5 crore — Rs 3 crore towards refurbishing the polyisobutene plant and the rest towards working capital.

Mr Rathi, confirming the development, told Business Line over telephone that the proposal for buying out the Duncan group's total stake of 37.32 per cent of the paid-up equity of Rs 16.41 crore (as on March 31, 2006) was being worked out after taking the liabilities into account. The current infusion of funds by the new investors has been made as an interest-free loan, which is convertible into equity.

The company management is also negotiating with IDBI for a one-time settlement for the outstanding loan of around Rs 8 crore and the interest. The accumulated loss is placed at Rs 24 crore, management sources said.

The company, which was supplier to IPCL, fell sick after non-renewal of the conversion contract in April 2004 by the principal client and plant operations were suspended. The company had not been able to pay the principal/interest dues from February/March 2004.

The management has now signed a long-term sale contract with Lubrizol. It has also begun negotiations with IBP, BPCL, HPCL and IOC. It is expected that it would produce around 5,000 tonnes of polybutenes in the remaining eight months.

The stock shot up by over 9 per cent on Thursday to Rs 16.19 with a traded quantity of 1.42 lakh shares on the BSE. The two-week average quantity is 1.05 lakh shares.

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