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Reliance Petro divestment plan gets CCEA go-ahead

Our Bureau

NEW DELHI, June 21

THE Cabinet Committee on Economic Affairs (CCEA) today cleared the proposal of Reliance Petroleum Ltd for disinvestment of up to 780 million equity shares held by Reliance Industries Ltd (RIL) in tranches.

Briefing newspersons on the CCEA meeting chaired by the Prime Minister, Mr A.B. Vajpayee, at his official residence here, the Union Parliamentary and Information Technology Minister, Mr Pramod Mahajan, said this disinvestment would occur through global d epository receipts (GDRs) issue of foreign currency convertible bonds (FCCBs) and ordinary shares.

The amount is expected to be between $750 million and $1,000 million, equivalent to Rs 3,500-5,000 crore at current market price. The shares proposed to be offered for disinvestment represent 14.99 per cent of the paid-up capital.

The disinvestment is being subject to certain conditions which include among others (i) the provision of Foreign Exchange Management Act (FEMA) would be complied with; (ii) requirement of the SEBI takeover code would be applicable if the GDRs are cancele d and the shares registered with the company; (iii) mandatory approval under the Companies Act as applicable would be obtained by the company prior to the issue; and (iv) proceeds of the issue should be repatriated to India within period of one month.

RIL was issued approval to set up and operate oil refinery with nine million tonne per annum (MTPA) crude processing capacity to produce LPG, naphtha, gasoline, kerosene, diesel, fuel oil and asphalt pitch. The refinery project is being implemented by Re liance Petroleum Ltd and the capacity of the refinery was upgraded to 15 MTPA on September 30, 1994.

HDFC Bank equity offer: The CCEA also gave approval to the proposal of HDFC Bank for international equity offering of $150 million, with a right to retain over-subscription up to 15 per cent of the issue size. The approval is subject to the rider that is sue and price should be in conformity with SEBI/RBI guidelines. The proceeds would be utilised for working capital requirement and expansion of the activities of the bank.

The proposed ADR would increase total FDI holding in HDFC Bank up to 26.53 per cent.

The CCEA also approved the continuation of Centrally-sponsored scheme for strengthening of boarding and hostel facilities for girl students for secondary and higher secondary schools with some modifications to ensure better reach.