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The board of the directors of Mangalore Refinery and Petrochemicals Ltd (MRPL) has approved the acquisition of up to 100 per cent of the compulsorily convertible debentures (CCD) issued by ONGC Mangalore Petrochemicals Ltd (OMPL) from the debenture holders for an aggregate consideration of up to ₹1000 crore. OMPL is a wholly owned subsidiary of MRPL.
The fourth quarter of 2021-22 has been set as the indicative time period for the completion of the acquisition.
MRPL informed the stock exchanges that the CCDs will be purchased from unrelated third parties. Upon the merger becoming effective, the CCDs shall stand extinguished and cancelled in entirety without any consideration and without any further act or deed, it informed the stock exchanges.
The CCDs will be purchased at par value of ₹1 crore per CCD, plus accrued interest thereon. MRPL proposes to acquire up to 1000 number of CCDs being 100 per cent of the outstanding CCDs issued by OMPL.
Credit facilities
The meeting of the board of directors of the company also approved the availing of credit facilities of an amount up to ₹1025 crore from any bank / non-banking financial company / financial institutions / mutual fund / any other person, with or without security over the assets of the company. This amount will be availed for the purpose of funding the acquisition of the CCDs issued by OMPL.
On raising of funds by issuance of perpetual bonds, the board of directors advised the MRPL management to have further consultations with the proposed investors. The company informed the stock exchanges that no decision was taken in respect of issuance of perpetual bonds.
OMPL has an aromatic complex in Mangalore Special Economic Zone (MSEZ) with 442 acres of land. Incorporated on June 19, 2006, the greenfield OMPL project was commissioned in October 2014 at a total project cost of ₹6911 crore.
OMPL produces paraxylene and benzene. These products are sold mainly internationally through exports.
MRPL informed stock exchanges that a substantial quantity of paraxylene gets placed in South-East Asia. North-East Asia, US Gulf and Europe are the other consuming regions for this product.
For benzene, Middle East and China are the major destinations. OMPL receives its feedstock naphtha and aromatics from its parent company MRPL.
OMPL was jointly promoted by Oil and Natural Gas Corporation Ltd (ONGC) and MRPL with shareholding in the ratio of 49 per cent and 51 per cent, respectively. Later, MRPL fully acquired the ONGC shares in OMPL. The boards of MRPL and OMPL have approved the scheme of amalgamation of OMPL with MRPL, and a joint application has been filed with Ministry of Corporate Affairs on July 7, 2021.
The turnover of OMPL was at ₹8567.41 crore for 2018-19, ₹4954.17 crore for 2019-20, and ₹3388.79 crore for 2020-21.
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