Public sector oil company IBP Co Ltd, which has a 60 per cent holding in Balmer & Lawrie, plans to offload nine per cent of its stake in favour of the public, bringing its holding down to 51 per cent.
Balmer & Lawrie & Co Ltd, a member of the multi-diversified IBP Balmer & Lawrie group, plans to almost double its equity base to about Rs 30 crore from the present Rs 16.28 crore during the current financial year.
According to IBP-Balmer & Lawrie officials, the company is likely to go in for a Rs 4 crore rights issue and is awaiting the formal approval of the government.
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The equity base is being expanded primarily to part-finance the companys Rs 550 crore capital expenditure outlay over the ninth five year plan period, officials said.
At present, the parent company, IBP, has a holding of 60 per cent, about 17 per cent is with FIs while the balance is with the public.
The company is also exploring possibilities of sourcing funds through the external commercial borrowing (ECB) route to facilitate its Rs 550 capital expenditure plan, officials said.
Speaking earlier at the companys 80th annual general meeting yesterday, S N Mathur, chairman of Balmer & Lawrie, said, the current financial year would see the company improving its profitability figures.
We will definitely add another digit to our net profit figures this year. Mathur told shareholders. The company registered a 15 per cent drop in net profit at Rs 14.21 crore during 1996-97 as a result of investments in joint ventures with a high interest rate.
Commenting on the strengths of the company, Mathur highlighted resilience and highly diversified presence in key sectors as areas that would have to be further consolidated. Whatever field we are operating in we are a significant player if not the number one. he added.
The company also plans to turn the corner of its seven joint venture due to which the company has sustained considerable burden by way of investments. The emphasis will now be channelling the operations of the joint ventures in generating business for the parent company as well.