The Hindu Business Line : IndianOil seeks approval for BRPL merger

IndianOil has approached the Union Department of Company Affairs (DCA) for permission to take the shareholders nod on the proposed merger of Bongaigaon Refinery and Petrochemicals Ltd (BRPL) with itself, according to sources.

Following the DCA approval, expected in a month’s time, IOC would hold the extra-ordinary general meeting for shareholders’ approval to the proposed merger at a swap ratio of 4:37 (four equity shares of Rs 10 each of IOC for every 37 shares of Rs 10 each of BRPL). A simultaneous move will also take place from BRPL to clear the proposal by an EGM.

Once the EGM gives its nod in favour of the merger, DCA will hold a public hearing before clearing the proposal.

BRPL and IOC shares are now ruling at Rs 65 and Rs 449.85 on the BSE. Though both the shares posted a net gain of 12.85 per cent and 14.51 per cent, respectively, during the last one month, the current prices clearly favour a better swap in favour of BRPL.

The movement of both the shares had become disproportionate (in comparison to the proposed swap ratio), especially during the last one month. BRPL was relatively more volatile. The stock recorded a peak of Rs 77.90 on September 26; closed at Rs 57.9 on October 8; registered over nine per cent intra-day gain on October 12.

On Monday, both IOC and BRPL closed at the same level of the previous closing.

Interestingly, analysts say that while the issue of oil bonds could boost the shareholders sentiments on IOC, the movement of BRPL is not guided by any specific fundamental reason. Sources also rule out any recent FII interest in the stock.

More Stories on : Mergers & Acquisitions | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page