MRPL to acquire Rs 6,400-cr petrochemical plant in Karnataka

Mangalore Refinery and Petrochemicals Ltd (MRPL) today said it will take over a USD 1 billion petrochemical plant adjacent to its refinery in Karnataka in an all share deal.
MRPL had recently raised its stake in ONGC Mangalore Petrochemicals Ltd (OMPL), which is setting up an aromatic complex adjacent to the Mangalore Refinery at a cost of Rs 6,400 crore, to 51 per cent. It will now acquire remaining shares.
"MRPL's Board has approved the integration /restructuring of ONGC Mangalore Petrochemicals Ltd (OMPL)," the company said in a statement here.
OMPL is a greenfield petrochemical project at the Mangaluru Special Economic Zone, adjacent to MRPL's own 15 million tons a year refinery, and comprises an aromatic complex for production of Para-xylene and Benzene.

It is to use naphtha produced at the Mangalore Refinery to make raw material for manufacture of Polyester.
ONGC holds the remaining 49 per cent in OMPL.

The merger will be done through a share swap in the ratio of 100:513. MRPL "will issue 100 full paid-up equity shares of Rs 10 each to the shareholders of OMPL for every 513 fully paid up equity shares of Rs 10 each held by them."
ONGC currently holds 71.63 per cent stake in MRPL which will rise to 74.26 per cent after MRPL takesover OMPL. No shares will be allotted to MRPL in the capacity as a shareholder of OMPL as part of the amalgamation.

Hindustan Petroleum Corp Ltd's (HPCL) stake in MRPL will come down to 15.38 per cent from 16.96 currently. Public shareholing would also fall to 10.36 per cent from 11.41 per cent currently.
MRPL Managing Director H Kumar said operation of the aromatic plant being integrated with the refinery will provide higher returns for stakeholders, adding value to refinery product streams and flexibility to refinery to optimize its margins.
"We are really upbeat about this merger," he said.
Since this scheme is between two government companies, it will have to be approved by the Union Ministry of Corporate Affairs.
MRPL had in February raised its stake in OMPL to 51 per cent from 3 per cent in two tranches. It first raised the stake to 46 per cent and then to 51 per cent.

Prior to that, ONGC held 46 per cent and MRPL 3 per cent in OMPL. The balance 51 per cent was yet to be allotted. After the acquisition, OMPL became a subsidiary of MRPL and a Government companies under the Companies Act.
OMPL is jointly promoted by ONGC and MRPL for manufacturing 0.9 million tonnes per annum of paraxylene and 0.3 million tonnes of benzene from the aromatic streams of MRPL.