HPCL to buy stake after MRPL debt rejig

Mumbai: Hindustan Petroleum Corporation Ltd (HPCL) chairman and managing director H L Zutshi says HPCL will take a final decision to buy out the AV Birla group's 37 per cent stake in Mangalore Refineries and Petrochemicals Ltd (MRPL) only after the debt restructuring of MRPL.

MRPL, he says, has got a huge debt portfolio. "Currently, financial institutions [FIs] are working on a debt restructuring exercise. Once the process is over HPCL will consider the buyout of the Birla stake in MRPL."

Currently HPCL and MRPL have 37 per cent stake each in MRPL, with the rest being held by FIs and the public. The HPCL board, in March 2002, sought a detailed financial analysis of the company following the AV Birla group's announcement to pull out of the project. HPCL's subcommittee on investments reviewed the prospects of HPCL buying out the AV Birla group's stake in MRPL.

The HPCL board, after reviewing the subcommittee report, mooted a detailed study to go into the measures required to turn around the company. This included financial restructuring measures such as conversion of loan into equity, since the second phase (3 million tonnes) of the 9-million-tonne project has a sizeable portion of high-cost loans.

Zutshi says the corporation recently signed crude supply agreements with the Saudi-based Armco Oil Company and the Libya-based Libya National Oil Company. "HPCL's Mumbai refinery achieved a crude output of 5.63 million tonnes, against an installed capacity of 5.5 million tonnes, which represents a capacity utilisation of 102.4 per cent."

HPCL posted a net profit of Rs 424.90 crore for the quarter ended 31 March 2002 as compared to a net profit of Rs 326.48 crore for the corresponding period last fiscal. The board recommended a dividend of 100 per cent or Rs 10 per share.