Bharat Petroleum Corporation Ltd (BPCL)-owned Bharat Oman Refineries Ltd (BORL) is likely to come up with an initial public offer (IPO) next financial year.
NEW DELHI: Bharat Petroleum Corporation Ltd (BPCL)-owned Bharat Oman Refineries Ltd (BORL) is likely to come up with an initial public offer (IPO) next financial year. It has appointed merchant bankers for doing the groundwork for the IPO.
Senior company executives told DNA Money that the BPCL board in its meeting last week passed an enabling resolution that BPCL would subscribe to IPO whenever BORL goes for an offer.
When contacted, SK Joshi, BPCL director (finance) and a director on the BORL board, confirmed that the preparation for IPO had started. He did not elaborate on the IPO.
The IPO route is being explored since the financial closure of Rs10,378 crore refinery has been a delayed, and for drawing the first tranche of Rs6,387 crore loan finalised last year. Under the loan agreement, promoters need to subscribe to 25% of equity.
Oman Oil Company Ltd (OOCL), the other partner in BORL, has frozen its investment in the company, that is setting up a greenfield refinery in Bina at Madhya Pradesh. Sources said BPCL might go in for termination of joint venture agreement with OOCL if the shareholding of Oman government-owned company fell below 10% of the issued share capital of BORL.
OOCL and BPCL have so far invested only about Rs75.5 crore each in the refinery. The BPCL board had earlier approved an investment of Rs1,996 crore but since BORL is a non-government company, BPCL could not infuse equity without matching investment from OOCL.
BPCL had last year put in Rs900 crore into BORL as application money for the issue of convertible zero coupon debentures but the debentures were never issued. “The money would be adjusted against shares issued to BPCL at price and premium applicable for the IPO,” sources said.
jyoti_m@dnaindia.net
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