Indian Oil, Bongaigaon boards okay merger plan
The board of directors of Indian Oil Corporation Ltd and Bongaigaon Refinery and Petrochemicals Ltd (BRPL) today approved merger of BRPL with IOC.
The swap ratio is pegged at 4:37 (four equity shares of Rs 10 each of IOC for every 37 shares of Rs 10 each of BRPL). According to notices issued by the company to NSE, the proposed merger is subject to approval of the Union Government and other relevant authorities.
This is the second merger proposal forwarded by IOC. The merger proposal of IBP is in an advanced stage of implementation. IOC has already expressed its intentions of proposing a merger scheme for Chennai Petroleum Corporation following the merger of BRPL.
BRPL refines a little over two million tonnes of crude oil. The refined products include 0.93 million tonne of high-speed diesel, 0.20 mt of motor spirit, 0.27 mt of kerosene, 0.05 mt of LPG and others.
Savings
Since the entire bouquet of refined products are evacuated by IOC the merger will lead to an immediate savings of roughly Rs 120 crore, now paid on CST, to the group.
BRPL registered a net profit of Rs 175 crore in 2005-06 on a turnover of Rs 5,636 crore.
During the first six months of this fiscal, the company registered a net profit of Rs 132 crore on a turnover of Rs 3,221 crore.
The company shares closed at Rs 50.85 at NSE on Wednesday, 5.4 per cent lower than the previous day’s closing at Rs 53.75.
IOC shares closed at Rs 462.90 today, 4.04 per cent lower than the previous day’s closing price at Rs 482.40.
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