The Hindu Business Line : Indian Oil-BRPL merger plan awaits Cabinet nod

Kolkata June 18 IndianOil is expecting the Union Cabinet committee to approve the merger proposal of Bongaigaon Refinery and Petrochemicals Ltd (BRPL) with itself next month.

"We are expecting the Cabinet note for the same to be circulated in June. Hopefully, the approval will be available in July," a senior company official told Business Line.

The board of directors of both the company approved merger of BRPL with IOC in November 2006. The swap ratio was pegged at 4:37 (four equity shares of Rs 10 each of IOC for every 37 shares of Rs 10 each of BRPL). IOC holds 74 per cent stake in BRPL.

This was the second merger proposal forwarded by IOC after IBP. The later was merged with the parent on May 2.

Located at Bongaigaon in Assam, BRPL now refines roughly 2.35 million tonnes of crude. The company has registered a net profit of Rs 239 crore on a gross turnover of Rs 6,426 crore in 2006-07.

Shares of BRPL ended at Rs 47.30, lower by 0.11 per cent on the BSE on Monday.

Refining capacity

While efforts to enhance the refining capacity (of BRPL) was unsuccessful so far due to non-availability of adequate crude oil in the north-eastern region, BRPL has recently lined up a Rs 2,000-crore investment plan to increase profitability by upgrading product quality and replacing the existing production of black oil and naphtha with high value products.

The company has also stopped operating its polyester staple fibre plant. The plant was run on naphtha and turned unviable.

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