Mrpl To Issue Rs 726cr Fcds To Promoters

The Mangalore Refinery and Petrochemicals (MRPL) will be issuing Rs 726-crore worth fully convertible debentures (FCD) to promoters on preferential basis.

The funds raised will be used to part-finance MRPLs Rs 3,690 crore expansion to take up refinery capacity from three million tonnes to nine million tonnes.

The company, jointly promoted by the Aditya Birla group and Hindustan Petroleum Corporation, (HPCL), is calling an extra-ordinary general meeting (EGM) on June 27 to seek the sharebolders approval for the issue. Birla group sources said the pricing will be as per the Securities and Exchange Board of India (Sebi) guidelines on preferential offers and conversion will be within 18 months.

 

MRPL is planning an equity issue at the time of conversion so that the promoters stake remains at the same level.

Both HPCL and the Aditya Birla group hold 26 per cent in MRPL. The public holds 43 per cent and financial institutions, mutual funds and FIIs hold around five per cent.

If the public issue does not come through, the promoters stake would rise, otherwise it will remain at same level, explained sources.

This is the second preferential issue by the Aditya Birla group in the last one year. Last year, group company Indo Gulf Fertilisers made a Rs 100-crore preferential issue, which increased promoters stake in the company.

After the proposed public issue by Indo Gulf next year, the promoters stake will come back to its original level. MRPL will need equity of nearly Rs 1,400 crore to fund its expansion. With Rs 726 crore coming from the promoters, the remaining is expected to be raised from the float, said analysts.

MRPL commissioned its three million tonnes refinery towards the end of 1995-96 and it has been operating at more than 100 per cent capacity. The 1996-97 results have been delayed as the Oil Co-ordination Committee, (OCC), has not issued the new refining margins.