Nocil resumes talks with IOC, BPCL
By Praveen Chandran | 05 Apr 2002
Mumbai: The chemical and petrochemical major National Organic Chemical Industries Ltd (Nocil) has initiated talks with two public sector oil companies - Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) - to strike a possible equity investment deal, institutional sources say.
Nocil has been looking for a partner to invest in its proposed modernisation and investment plan ever since the Shell group backed out of the deal in June 2001. Currently, the Mafatlals hold 42-per cent equity in the company and financial institutions, another 26 per cent. The balance is held by the public.
The sources say: “Talks are in an advanced stage. The outcome could be either the Mafatlals selling a part or whole of their holding of 42 per cent, or Nocil issuing fresh equity on a preferential basis.”
Both IOC and BPCL have big plans in the petrochemical segment. Last week IOC had taken a 26-per cent stake in Haldia Petrochemicals. The company is one of the potential bidders for the government holding in the Indian Petrochemical Corporation Ltd.
BPCL had formed a joint venture alliance with the Tamil Nadu Industrial Development Corporation to set up a huge petrochemical complex in Chennai. But, due to the industrial downturn in the petrochemical sector, BPCL put off its plans to invest in petrochemicals. Currently, Nocil owes BPCL around Rs 120 crore on account of purchase of naphtha.
In December 2000, Basell Polyolefins, a 50:50 joint venture between Shell and BASF, had indicated that it was prepared to pick up a 76-per cent stake in Nocil, including the 42-per cent held by the Mafatlals.
But Basell Polyolefins changed its mind in June 2001, because an international company, which was supposed to partner Basell in the deal, backed out, as the global petrochemicals scene was not so encouraging to make fresh investments in the sector.
Nocil had already obtained shareholders’ approval, including financial institutions’, for the restructuring scheme. Under the scheme worked out in 1998, Nocil was supposed to be split into three companies confined to separate businesses - rubber chemicals, plastic products and petrochemicals. The Shell group had agreed to pick up some stake in the petrochemicals company.
Nocil has been looking for a partner to invest in its proposed modernisation and investment plan ever since the Shell group backed out of the deal in June 2001. Currently, the Mafatlals hold 42-per cent equity in the company and financial institutions, another 26 per cent. The balance is held by the public.
The sources say: “Talks are in an advanced stage. The outcome could be either the Mafatlals selling a part or whole of their holding of 42 per cent, or Nocil issuing fresh equity on a preferential basis.”
Both IOC and BPCL have big plans in the petrochemical segment. Last week IOC had taken a 26-per cent stake in Haldia Petrochemicals. The company is one of the potential bidders for the government holding in the Indian Petrochemical Corporation Ltd.
BPCL had formed a joint venture alliance with the Tamil Nadu Industrial Development Corporation to set up a huge petrochemical complex in Chennai. But, due to the industrial downturn in the petrochemical sector, BPCL put off its plans to invest in petrochemicals. Currently, Nocil owes BPCL around Rs 120 crore on account of purchase of naphtha.
In December 2000, Basell Polyolefins, a 50:50 joint venture between Shell and BASF, had indicated that it was prepared to pick up a 76-per cent stake in Nocil, including the 42-per cent held by the Mafatlals.
But Basell Polyolefins changed its mind in June 2001, because an international company, which was supposed to partner Basell in the deal, backed out, as the global petrochemicals scene was not so encouraging to make fresh investments in the sector.
Nocil had already obtained shareholders’ approval, including financial institutions’, for the restructuring scheme. Under the scheme worked out in 1998, Nocil was supposed to be split into three companies confined to separate businesses - rubber chemicals, plastic products and petrochemicals. The Shell group had agreed to pick up some stake in the petrochemicals company.