Centre orders NRL, BRPL restructuring

NEW DELHI, March 21: The Union Government today ordered the restructuring of the Numaligarh Refinery Limited (NRL) by clearing transfer of Indo-Burma Petroleum (IBP) stake in the Refinery to the Bharat Petroleum Chemical Limited (BPCL). By the same order the Government also cleared sale of Government's stake in the Bongaigaon Refinery Petro-chemical Limited (BRPL). The Indian Oil Corporation (IOC) would pick up Government's entire holding in the Petro-chemical unit turning it into its subsidiary. The Union Cabinet cleared both the proposals earlier. According to the order issued by the Ministry of Petroleum and Natural Gas, the BPCL would buy 19 per cent equity in NRL from IBP company and make it into its subsidiary. The Oil India Limited (OIL) was also asked to pick up 10 per cent equity of the NRL, the order said. According to an estimate the proceed from sale of 19 per cent equity held by IBP in NRL to BPCL would be in the order of Rs 172 crore at the face value of Rs 10 per share. The entire amount would accrue to the IBP. Similarly the Oil's stake in the NRL is estimated at Rs 91 crore. The amount would go to the NRL. The transfer of Government's stake in BRPL was justified on the ground the Refinery was passing through a crisis owing to locational difficulties and resources crunch. The petro-chemical required a massive investment to meet the environmental standards. The Government's stake in BRPL has been estimated to be Rs 1320 crore at the face value of Rs 10 per share. Meanwhile, as reported earlier in this newspaper the Government had plans to restructure the NRL for long though it was kept under wraps. It may be recalled that Parliamentary Standing Committee attached to the Ministry had suspected it as much and had advised NRL to get the exact valuation of its share done by a credible financial institution. The Parliamentary Standing Committee's advice to NRL was made in the wake of reports that the Union Government has decided to restructure NRL and that Bharat Petro-chemical Limited (BPCL) would take it over by buying Indo-Burma Petroleum's (IBP) stake in the refinery. The Committee's concern about the NRL apparently emanated from the delay in resolving several of the pending financial affairs of the Refinery by the Petroleum and Natural Gas Ministry. The committee, in fact rapped the Ministry for the delay in finalizing the Oil India Limited (OIL) as also for not mopping up additional Rs 100 crore as debt from the banks. Under the agreement, the OIL was supposed to pick up 10 per cent equity of the NRL. The Parliament Standing Committee felt that there has been some laxity on part of the NRL itself to tie-up its financial requirement. It also refused to buy the argument for not going to the market to raise additional finances on the ground that primary capital market is passing through a depression. "To say that NRL has not been able to approach the capital market for retailing the public issue due to depressed primary market conditions is taking a simplistic view. Market conditions had not been depressing all along but been promising too in the past," the committee remarked, leaving the matter for the NRL management to decide.