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February 7, 2001
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Money > Reuters > Report February 7, 2001 |
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IPCL Baroda plant sale to be delayedCompletion of state-owned IPCL's sale of its Baroda plant to Indian Oil will be delayed by about three months by the need to divide assets and transfer environmental and other clearances, a minister said on Wednesday. The government plans to sell the plant belonging to Indian Petrochemicals Corp Ltd to Indian Oil Corp Ltd, the country's largest oil refiner, as a first step to disposing of part of its 59.95 per cent stake in IPCL. "How the marketing network (assets) is going to be divided between IOC and the other two plants is an important question," Arun Shourie, Minister of Divestment said. He said IPCL has nine types of environmental and other safety-related clearances for the Baroda plant. "The legal question is do these clearances go with the transfer of assets or do they remain with the company?" he said on the sidelines of a Confederation of Indian Industry seminar. "All these things take time," Shourie told reporters, predicting that resolving these issues would take about three months. He said the question of transfer of clearances would have implications for the sale of government stakes in other companies like Bharat Aluminium which is also on the block. Runs three plants IPCL, India's second largest petrochemicals company, runs three plants at Baroda, Nagothane and Gandhar in Gujarat and Maharashtra. The plants together produce 1.4 million tonnes of petrochemical products annually. In November, a federal cabinet panel approved the sale of its Baroda plant to IOC at a negotiated price and a part of its equity in the other two units to a strategic partner. Shourie said a value for Baroda plant had not yet been decided. But the government would proceed with inviting bids to sell its holdings in the other two plants without waiting to complete the sale of the Baroda unit, he added. "They will happen simultaneously." The sale of the Baroda unit will free IPCL of an old unit and the bulk of its 14,000 workforce and improve its valuations. IOC, which has a refinery nearby, wants to buy the Baroda unit to ensure a captive buyer for naphtha, one of its main products.
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