MRPL To Issue Preferential Shares To ONGC, Lenders
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The board of Mangalore Refinery & Petrochemicals Ltd (MRPL) has approved issuance of additional equity shares of up to Rs 2,000 crore on preferential basis as per the existing Sebi guidelines to Oil and Natural Gas Corporation (ONGC) and the lenders of the company, on conversion of their debt into equity. The decision was taken at a meeting on August 8, 2002.
This is part of the proposed financial restructuring of the company, subject to approval of shareholders and lenders of the company. The approval of lenders and shareholders is subject to Govt approval for cancellation of tripartite Memorandum of Understanding (MOU) dated June 26,1987 between Govt of India, Hindustan Petroleum Corporation Ltd (HPCL) and Indian Rayon & Industries Ltd (IRIL). This is following the completion of sale of shares of IRIL and its associates in MRPL to ONGC. The AV Birla group divested its entire 37.38 per cent equity stake for an aggregate value of Rs 60 crore to ONGC at a value of Rs 2 per share.
MRPL’s refinery was conceived and configured when the Administered Price Mechanism (APM) was in place. AV Birla group earlier had said that the surplus product position in the country, low gross refining margins in the Asian region, deteriorating liquidity and leverage position of MRPL were hampering the operations of MRPL.