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Kochi, Jan. 21

THE Officers Association of Kochi Refinery Ltd (KRL) has expressed disappointment over the share swap ratio recommended for the merger of KRL with Bharat Petroleum Corporation Ltd (BPCL), saying that the present ratio is `far from a fair deal.'

On January 17, The boards of BPCL and KRL had arrived at a swap ratio of four BPCL shares for every nine shares of KRL.

"The majority of KRL employees are also shareholders of the company. As shareholders and employees, they feel that the present swap ratio is far from a fair deal," the Cochin Refineries Officers Association said in a statement here on Wednesday.

The association said the KRL share was ruling at 1.5 to 1.8 times the BPCL share in the market for quite a long period and the present swap ration is a "hit on the back for KRL shareholders too."

"This is now believed to be one of the many setbacks this refining company and its employees could face considering the manner in which the merger process is being conducted," the statement said.

By announcing a very `unfavourable swap ratio' of KRL and BPCL shares, the boards belied the perception of the employees and the shareholders of the company, it said, adding that the reaction of the stock market is a testimony to this.

The association alleged that the interest of BPCL seemed to be concentrated more on the huge profits of KRL and not fully on the synergies of the merger. "This attitude could turn out to be detrimental to the prospects of the refinery," it said.

(This article was published in the Business Line print edition dated January 22, 2005)
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