Kolkata, Sept. 2
IBP Co Ltd will soon hive off its LPG division to Indian Oil Corporation Ltd. This was stated by Mr Sarthak Behuria, Chairman of both the companies, at the 97th annual general meeting of IBP Co Ltd held here today.
The hiving off process would be complete even before IBP Co is formally merged with IOC.
He described the proposed merger of IBP Co with IOC as an "irreversible decision" which was the "best thing" that could happen to IBP in the present scenario.
He said the swap ratio would not change irrespective of the declining fortunes of IBP.
Mr Behuria said the decision to hive off the LPG division of IBP had been taken with a view to ensuring that IBP does not have to bear any longer losses suffered on account of under recoveries on retail sales of LPG.
Last fiscal, IBP had to absorb under recoveries to the tune of Rs 352 crore in respect of retail sales of kerosene and LPG alone.
According to him, in the first quarter of the current fiscal, IBP's total under recoveries stood at Rs 391 crore, which was about 70 per cent of the company's aggregate under recoveries of Rs 563 crore in 2004-05.
As part of its growth plan in the years ahead, IBP Co Ltd would focus on maintaining synergy with IOC to ensure cost benefits.
However, IBP's brand identity would be retained and its retail strengths leveraged upon.
The company's explosives division had achieved a turnaround even as its cryogenics business group had set for itself a revenue target of Rs 25 crore in the current fiscal.
During the year ended March 31, 2005 IBP Co recorded a turnover of Rs 13,274.69 crore against Rs 10,148.18 crore in 2003-04.
The net profit for 2004-05 was Rs 59.87 crore compared with Rs 214.66 crore in 2003-04.
A 100 per cent dividend (Rs 10 on each equity share of the face value of Rs 10 each) was declared for the year gone by.