The central government has paid the Rs 350 crore due from the OCC (Oil Co-ordination Committee) to IBP, making it a near debt free company before disinvestment.
Disclosing this, a top IBP official said the official confirmation of the clearance of the last tranche of the due has been communicated to the company very recently.
"The entire process will be over by next couple of days. IBP will be a debt free company once the proceeds from OCC is transferred to OIDB (Oil Industry Development Board) to pay off the loan," the official added.
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IBP was to get Rs 350 crore from OCC at the end of March 31, 2001, and it had to pay up nearly Rs 380 crore to OIDB. The company had pursued OCC for the payment. The last tranche of Rs 100 crore that has been recently cleared by the ministry of petroleum and natural gas, will be received by IBP by January 4, 2002.
As IBP was perceived as a test case for disinvestment of public sector oil companies, the favourable debt equity ratio of 1:1 will make it more attractive to bidders. The government was keen on speedy execution of IBP divestment and therefore cleared the dues promptly.
The development comes close on the heels of CCD (Cabinet Committee on Disinvestment) meeting on Wednesday, which cleared the draft shareholder agreement for sale of 33.58 per cent stake in the company. Price bids have been scheduled for call on January 20, 2002.
The successful bidder will have the option of acquiring the rest 26 per cent of government's stake in IBP after three to five years from now. Sources said nine companies, both Indian and multinational, were in the fray and would take part in the price bid. The reserve price for the pie is being calculated by the inter-ministerial group (IMG) and it will be ready before price bid.
The Rs 8500 crore IBP was a purely marketing company with 1500 retail outlets, mostly located in eastern and northern India. Thus IBP was seen as safe bet for entry into Indian petroleum sector.