The Hindu Business Line : IOC-BRPL merger may be approved soon

Kolkata, Dec. 7 After IBP it is now the turn of the Assam-based Bongaigaon Refinery & Petrochemicals Ltd (BRPL) to be merged with parent company IndianOil. According to senior officials of both the companies, the Department of Company Affairs has concluded all the proceedings in this regard and the approval is expected in December-January.

According to officials, DCA has also kept the swap ratio unchanged at four equity shares of Rs 10 each of IOC for every 37 shares of Rs 10 each of BRPL, according to the original proposal forwarded by the boards of both the companies in November 2006.

IOC holds 74 per cent stake in BRPL. Once the order is available it would be up to the two companies to decide on the date of effecting the merger within a stipulated timeframe.

Merging possibilities

Apart from opening possibilities of reducing the cost structure by integrating operations and capacity optimisation, the merger is expected to leave a net positive impact of approximately Rs 80 crore on the merged entity by way of avoiding double taxation on product transfer.

“The proceedings for merger are over. We are expecting the Centre to issue the order approving the merger in the next couple of weeks,” Mr S.V. Narasimhan, Director (Finance) of IOC, told Business Line.

“The public hearing concluded in mid-November and we are expecting the order to be issued latest by January,” a BRPL official added. The company posted a net profit of Rs 294 crore on a turnover of Rs 6,114 crore during the last fiscal.

Originally planned as a unit of the erstwhile IPCL, BRPL was incorporated in 1974 as a Central PSU to set up a 1 million tonne refining-cum-petrochemical unit at Bongaigaon in Assam. Though parts of the project were commissioned in 1979, full commissioning was achieved in 1988.

In 1995, the company enhanced the refining capacity to 2.35 million tonne. However, it took the company another decade to utilise the expanded capacity, post-takeover by IOC in 2000-01.

Under the IOC regime, BRPL stopped operating its naphtha-based petrochemicals facilities, which were incurring heavy loss. A Rs 2,000-crore project is currently being implemented for quality and yield upgradation.

IOC is nurturing plans to enhance the crude availability in BRPL by utilising the upcoming Paradip-Haldia pipeline with the existing pipeline facilities connecting Haldia-Barauni and Assam.

BRPL’s defunct petrochemicals marketing offices in Kolkata, Mumbai and Delhi may be closed post-merger. BRPL currently has manpower of 1,600. Shares of IOC and BRPL closed at Rs 37.30 and Rs 384.95 respectively at BSE on Friday.

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IOC gets nod for BRPL merger

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