Financial Daily from THE HINDU group of publications
Saturday, Aug 10, 2002
Industry & Economy - Petroleum
HPCL says not interested in MRPL preferential offer
MUMBAI, Aug. 9
HINDUSTAN Petroleum Corporation Ltd (HPCL) today said it was "not interested" in the Rs 2,000-crore preferential shares issue to be made by Mangalore Refinery and Petrochemicals Ltd (MRPL).
According to analysts, the company was only completing a formality in the process of MRPL stake sale to the Oil and Natural Gas Corporation (ONGC). HPCL holds 37.5 per cent stake in MRPL along with ONGC, which recently bought out the A.V. Birla group's 37.5 per cent stake in the company at Rs 2 per share.
MRPL had, on August 8, informed the Bombay Stock Exchange of its decision to issue additional equity worth Rs 2,000 crore on preferential basis to the lenders of the company, led by ICICI.
The preferential shares would be allotted on conversion of debt to equity as part of the company's financial restructuring.
HPCL has informed the A.V. Birla group and the BSE of its decision. The company's decision is subject to Union Government approval.
The preferential shares allotment is also subject to the approval of the Union Government for cancellation of the tripartite agreement between the Government, HPCL and the Birla group companies.
The additional preferential issue is expected to improve MRPL's debt-equity ratio. MRPL has a debt of close to Rs 5,300 crore.
HPCL shares today closed at Rs 278.55 (Rs 277.05) on the BSE.
Borrows Rs 300 cr
Hindustan Petroleum Corporation today borrowed Rs 300 crore at 6.05 per cent in the form of short-term funds.
The amount was raised through MIBOR-linked loans with a spread of 30 basis points, which the company claimed was the lowest spread as of date.
"The funds will be used to replenish earlier loans," a senior company official said when contacted.
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