IOC buys IBP stake in Tanking

Praveen Chandran
24 January 2002

Mumbai: Indian Oil Corporation (IOC) has bought out IBPs 25 per cent stake in Indian Oil Tanking (IOT), a company engaged in the storage and handling of petroleum products, for Rs 44 crore.

IOCs move is part of IBPs divestment that was kick-started by the government few months ago. IOT was a joint venture between Oil Tanking of Germany, IOC and IBP. Both IOC and IBP hold 25 per cent in the company and the German partner holds another 50 per cent.

Says IOT general manager (finance) Jatin Mavani: "The promoters had appointed SBI Caps as the advisor for the stake sale, and IOC bought out the entire IBP stake. With this sale of stake, IOT is now a 50-50 joint venture between IOC and Oil Tanking, Germany."

Senior SBI Caps officials say Rs 27.5 crore was the book-value price for the IBP stake and the total share transfer price was Rs 44 crore. "The government wants to retain 50 per cent of this company with a public sector undertaking, so the stake was taken over by IOC prior to IBP privatisation.

" IOT is the only company that exclusively handles the storage operations of petroleum products in the country. The company owns and operates one storage facility at the Jawaharlal Nehru Port Trust, Maharashtra, and operates another three storage facilities on a lease basis. IOT has also proposed around 10 storage facilities in different parts of the country. Besides this, IOT is also engaged in the construction of oil jetties and terminals at ports.

IBP had invested Rs 37 crore in IOT. In 2000-01 the company recorded a sales turnover of Rs 125 crore with a profit-before-tax of Rs 13 crore. OTL officials say commercial arrangements between IBP and IOT will remain unaltered after the stake is transferred to IOC.