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July 3, 2001
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Money > Reuters > Report July 3, 2001 |
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CCD set to consider IBP demergerThe department of divestment has recommended that Balmer Lawrie be hived off from state-run IBP Co to make the petroleum marketing firm more attractive for private bidders, a government official said. IBP holds a 62-per cent stake in Balmer Lawrie which is engaged in a wide range of businesses such as industrial packaging and lubricant manufacturing. The government has announced plans to sell a controlling stake of 33.6 per cent in IBP to a strategic partner as a part of a drive to privatise state-owned firms. It owns 59.6 per cent of IBP's 221.5-million equity. "The department of divestment is seeking the Cabinet Committee on Divestment's approval," the official, who did not want to be identified said. "The committee is expected to meet on Wednesday and consider the demerger of Balmer Lawrie Co from IBP," he said. The government is planning to transfer IBP's holding in Balmer Lawrie to a new public company, IBP Investment and Finance Co Ltd, the official said. The new company will be incorporated in Calcutta with a share capital of Rs 500,000 and will be managed by nominees of the federal government, he said. Separating these businesses will make IBP more attractive to global and domestic refiners, who are eyeing the firm's network of 1,514 petrol stations in eastern and northern India, the official said. At least a dozen companies including global oil majors Royal Dutch/Shell and Caltex, a joint venture between Chevron Corp and Texaco, and large domestic firms are in the race to buy the government's stake in IBP. IBP's petrol stations form a readymade network for a refining company to sell its products when India throws open its oil and gas sector next April. Under the current policy, petrol pumps can be set up only with the petroleum ministry's approval. India's biggest private refiner, Reliance Petroleum Ltd, sells products from its 540,000-barrel-per-day refinery through state-run firms, Indian Oil, Hindustan Petroleum Corp Ltd, Bharat Petroleum Corp Ltd, and IBP.
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