Search the Internet          Tips  Sites: Finance, Investment

IOC seals IBP deal for Rs 11.54 bn

Country's only Fortune 500 company, Indian Oil Corporation, on Tuesday acquired 33.58 per cent of government equity in petro product retailer IBP Co Ltd for a consideration of Rs 11.54 billion.

IOC chairman M A Pathan presented a draft of Rs 11.54 billion to Petroleum Minister Ram Naik to take management control of IBP's 1553 retail outlets, 376 kerosene dealerships and 17 LPG dealerships.

Speaking on the occasion, Naik said IOC's acquisition of IBP, just before a new decontrolled regime in petroleum sector sets in from April, 2002, has renewed interest of MNCs and Indian investors in the divestment process of the government.

"Administered pricing mechanism will be dismantled and the new regime would set in from April 1, 2002," he said.

Naik said IOC gets 1553 retail outlets for Rs 18.41 billion (Rs 11.54 billion for 33.58 per cent government stake and about Rs 6.88 billion for acquisition of 20 per cent more from the open offer).

"The average turns out to be Rs 12 million per retail outlet as against a cost of Rs 30-40 million for putting up a retail outlet."

Besides, it would have taken IOC 5 years to put in place 1500 retail outlets at the present pace of 300 retail outlets a year, he added.

YOU MAY ALSO WANT TO READ:
The Divestment Development
The Rediff Budget Special
Run-Up To The Budget