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IBP approves demerger of subsidiary

The board of state-run petroleum marketing firm IBP Co has cleared a proposal to demerge its subsidiary Balmer Lawrie Co, an economic daily reported on Wednesday.

The Business Line newspaper quoted unnamed officials from the department of divestment as saying the board's approval may also pave the way for a possible valuation of IBP's 62 per cent stake in Balmer Lawrie, engaged in a wide range of businesses such as industrial packaging and lubricant manufacturing.

Both companies could not be immediately reached for confirmation.

The approval sets the stage for the government's proposal to sell a 33.9 per cent stake in IBP to a strategic investor as a pure petroleum marketing firm.

IBP's divestment is likely to be completed within two months, the paper said.

The eventual stake sale is a part of its drive to unlock value in state-owned assets. The government owns 59.6 per cent of IBP's Rs 221.5 million equity ($4.7 million).

At least 12 companies, including global oil majors Royal Dutch/Shell and large domestic firms are in the race for IBP, attracted to the firm's retail assets.

Shares of IBP ended 0.79 per cent higher at Rs 349.35 on the Bombay exchange on Tuesday, and those of Balmer Lawrie surged 7.88 per cent to Rs 28.

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