BPCL-KRL merger approved
19 January 2005
Kochi: The boards of Bharat Petroleum Corporation Ltd (BPCL) and its subsidiary Kochi Refineries Ltd. (KRL) have approved the amalgamation of both companies and have recommended a swap ratio of 1:2.25.
That is four fully paid up equity shares of Rs10 each of BPCL for nine fully paid up equity shares of Rs10 each of KRL. The boards held separate meetings at Mumbai on Monday. BPCL has 54.81 per cent shares in KRL.
The two companies have to get further approval from the Department of Company Affairs, shareholders and creditors etc on the swap ratio. The whole due diligence process could be completed by August-September, according to top sources in the company.
The Kerala Government along with KSIDC have about 5.54 per cent stake in KRL. This could be reduced to a minuscule after the amalgamation.
With the announcement of the swap ratio, the BPCL scrip has spurted while KRL share crashed. BPCL share moved up from Rs410.70 to Rs419.85 on Tuesday. The KRL share fell from Rs220.70 to Rs186.50.
The decision to proceed with the amalgamation was taken at the BPCL AGM held in last August. The union between a strong profit-making marketing and refining companies is considered to be a win-win situation for both.
As part of the quality upgradation exercise undertaken by KRL, its capacity will rise to 10-million tonne from the existing 7.5 million tonne. Besides, BPCL had recently given a commitment to market the entire quantity of 2.5 million tonne of LNG proposed to be imported as part of Petronet LNG's Kochi project.