The Hindu : Reliance to make open offer for 20 p.c. IPCL stake

Online edition of India's National Newspaper
Monday, May 20, 2002

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National

Reliance to make open offer for 20 p.c. IPCL stake

By Our Staff Correspondent

MUMBAI May 19. Reliance is set to acquire a 26 per cent equity stake in the Indian Petrochemicals Corporation Ltd. (IPCL), owned by the Government of India. The proposed acquisition, through an open and transparent process of global competitive bidding, follows Reliance's successful bid of Rs. 1,491 crores at Rs. 231 per share and is at a 74 per cent premium to IPCL's last traded share price.

Reliance will also make an open offer for acquiring a further 20 per cent equity stake at the same price, thereby substantially enhancing value for IPCL's remaining shareholders. Reliance's total investment for the acquisition is estimated at Rs. 2,638 crores. The transaction value of Rs. 1,491 crores will represent the highest public sector unit (PSU) disinvestment proceeds to be received by the Government in a single transaction.

The managing director, Reliance Industries, Anil Ambani, said, "The completion of the IPCL disinvestment will mark a new milestone in the Government's PSU disinvestment programme and will carry forward the process of economic reforms in the country. We are happy that Reliance has had the opportunity to play a role and to contribute substantial value in this process."

IPCL is India's 19th largest company in terms of sales and is the second largest petrochemicals company in terms of sales, assets, net worth and profits. It owns and operates three petrochemical complexes, a naphtha-based complex at Vadodara and gas-based complexes at Nagothane and Dahej. It also owns a catalyst manufacturing facility at Rabale, Navi Mumbai. It produces over 1.3 million tonnes of merchant products, has a turnover in excess of $1 billion and employs 14,000 workers. Its product portfolio includes polymers, synthetic fibres, fibre intermediates, surfactants, industrial chemicals, catalysts and adsorbents.

According to a press release, following the acquisition, Reliance's petrochemicals production of 11.5 million tonnes per annum would increase by over 1.33 million tonnes and its sales of over Rs. 58,000 crores per annum will increase by Rs. 5,200 crores.

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