Kumar Mangalam Birla, chairman of the Aditya Birla group, has chosen to resign from the board of Mangalore Refinery & Petrochemicals (MRPL), the group's joint venture with Hindustan Petroleum Corporation (HPCL).
The resignation of Birla, who was also the chairman of MRPL earlier, comes in the wake of the Birla group's plans to exit from the oil refining company by divesting its entire 37 per cent stake.
However, the group has nominated B N Purnamalka, director in charge of the group's energy business, and the former managing director of Indo Gulf Corporation, as Birla's replacement.
A group spokesperson only said: "The chairman's resignation follows his decision to bring down the number of directorships he holds."
Currently, Ravi Kastia, another Birla nominee is the managing director of MRPL and it is expected that all Birla representatives in the MRPL board and executive management would eventually step down when the group exits from the venture.
Among other changes on MRPL's board, Hindustan Petroleum Corporation (HPCL), the equal partner in the joint sector refining company, has nominated DS Mathur, its director (refineries) in place of SK Kapoor, director (marketing) of the company. H L Zutshi, chairman and managing director of HPCL, is the current chairman of MRPL.
The Birla group is currently doing the due diligence prior to their exit from MRPL. It has, along with HPCL, has appointed consultancy firms SBI Caps and Arthur Anderson to do a valuation of their stake in MRPL. While HPCL has already referred the decision on whether to buy out the Birlas' stake to a four-member investment committee panel, Indian Oil Corporation has already evinced interest in acquiring the Birlas' stake in MRPL.
HPCL, however, retains the first right of refusal on the sale of the Birlas' 37 per cent stake in the company.
The ailing company, having kicked off a massive financial restructuring process, has roped in Lazard to bring down its debt-equity ratio from an unwieldy 6:1 to a more respectable figure. The company, which has a huge debt component of around Rs 5,400 crore, is currently awaiting Lazard's business plan, which will be put before its lenders for initiating the restructuring process.
