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RPL plans Rs 1,000-cr preference share issue

Our Bureau

COIMBATORE, May 27

RELIANCE Petroleum Ltd (RPL) proposes to raise Rs 1,000 crore by offering redeemable preference shares. It has also sought shareholders' approval for hike in FIIs' investment limit up to 49 per cent of its paid-up equity capital.

Resolutions to give effect to the two proposals figure as special resolutions to be considered by the shareholders at the annual general meeting (AGM) to be held on June 12, at Motikhvadi, in Jamnagar, Gujarat.

The first special resolution seeks the shareholders' nod to the board to offer/issue/allot, in the course of domestic and/or international offering, redeemable preference shares of the face value of Rs 10 each up to a sum not exceeding Rs 1,000 crore to various segments of investors through public issue or rights issue or private placement or otherwise, in one or more modes or combinations thereof and in one or more tranches.

In the other resolution, RPL has sought the permission of the shareholders for investments by FIIs, including their sub-accounts, in the shares or debentures convertible in to shares of the company by purchase or acquisition from the market under portfol io investment scheme under Foreign Exchange Management Act (FEMA) subject to the condition that the total holding of all FIIs put together shall not exceed 49 per cent of the paid up equity share capital/paid up value of respective series of the converti ble debentures of the company.

The exact holding of the FIIs at present in the equity capital of RPL is not clearly known since the company had clubbed FIIs investments with other international investors in its recent advertisement relating to the proposed GDR issue.

The company had given the following break-up in the advertisement under the column `shareholding pattern' regarding the holding percentage of the equity capital of RPL as on March 31,2001: Bodies corporate- 66 per cent; international investors (GDRs/FIIs /Non-residents/NRIs-8 per cent; Indian financial institutions/banks/mutual funds-9 per cent; public and others-17 per cent.

The company has stated that the increase in the FIIs limit to 49 per cent `will result in increased weightage of the company's share in benchmarking international stock market indices'. It further observed that large number of FIIs `direct their investme nt on the basis of these benchmark indices' and said the increase in FIIs limit will be beneficial to the company.

In the annual report for 2000-01, the company has stated that it processed 25.7 million tonnes of crude oil in the year, reflecting an average capacity utilisation of 95 per cent (despite the short shutdown caused by the earthquake which rocked Gujarat i n January). This, the company said, compared favourably with the average rate for other Indian refineries at about 91 per cent and also in other regions-North America-93 per cent, Europe-86 per cent and Asia Pacific-96 per cent. Last year was the first y ear of operation for RPL after it began commercial production on April 1, 2000.

The company recorded sales of Rs 30,963 crore and a net profit of Rs 1,464 crore. It has become the largest private sector company in the country in terms of sales and second only to its parent Reliance Industries Ltd (RIL) in terms of net worth, assets and net profits, based on performance in its very first year of operation.

The company board has recommended a maiden dividend of 5 per cent and its dividend payout (including dividend tax) would absorb Rs 262 crore.