Mangalore Refinery and Petrochemicals Limited (MRPL) shareholders have approved the process of the Oil and Natural Gas Commission (ONGC) taking over their company. At the extraordinary general body meeting held yesterday, the shareholders approved the takeover with majority equity of 51 pc and exclusive management control, ONGC chairman and managing director Subir Raha told newspersons at the mrpl plant site today.He said that but for this intervention, this modern refinery would have been a case for the Board for Industrial and Finance Reconstruction (bifr) within the next three days. The state-of-the-art mrpl had been facing serious difficulties due to excessive debt, low capacity utilisation and management conflicts. With continuing erosion of the net worth, bifr had to be notified, which had been avoided with the ONGC taking up the case at the instance of the Ministry of Petroleum and Natural Gas, he added.Raha said the MRPL, set up as a joint venture under a tripartite agreement in 1987 among the centre, Hindustan Petroleum Corporation Limited (HPCL) and Indian Rayon Industries Limited (itil) and associated companies of the Aditya Birla Group, was commissioned in two phases — 3.69 m metric tonnes per annum (mmtpa) in March 1996, followed by 6.0 mmtpa in February 1998. Raha said the ONGC had been granted marketing rights for transporting fuel by the Centre in may last. Assured sourcing of product for mrpl would facilitate ONGC’s entry into retail marketing by 2003-04. ONGC had produced and marketed directly more than 5mmtpa products from the processing facilities at Uran and Hazira. The marketing rights would take ONGC, with the core business of exploration and production of oil and gas, one step further in forward integration, he added.He said over six weeks in June-July 2002, ONGC had negotiated buy-out of abg’s equity 37.38 per cent at Rs two per share of Rs 10 and a debt restructuring package (drp) with the consortium of 12 lenders. In the drp, with fresh equity of Rs. 600 crore being brought in by ONGC, the debt-equity ratio would improve to 2.5:1 from over 15:1 and debt service converge ratio (dscr) would become positive at 1.27, he added.
