New Delhi: The board of Mangalore Refinery and Petrochemicals Ltd (MRPL) on Thursday set up a committee of directors to explore the possibility of taking over a USD 1 billion petrochemical plant adjacent to its refinery.
ONGC Mangalore Petrochemicals Ltd (OMPL), where MRPL recently raised its stake to 51 per cent, is setting up an aromatic complex adjacent to the Mangalore Refinery at a cost of Rs 6,400 crore. The unit is to use naphtha produced at the Mangalore Refinery to make raw material for manufacture of Polyester.
MRPL said its board in a meeting today "approved the formation of an Empowered Committee of Directors, consisting of (company) Managing Director H Kumar, Director (Finance) Vishnu Agrawal and Director (Refinery) M Venkatesh, to explore and evaluate various options available for the restructuring/ integration of the company and OMPL".
The objective behind the exercise is to "primarily bring about better synergy across the group, and to ensure that the businesses of these entities are operated in the most efficient and cost effective manner", MRPL said.
Upon completion of evaluation of the possible restructuring options, the ECoD is to submit recommendations to the Board.
MRPL had in February raised its stake in OMPL to 51 per cent from 3 per cent in two tranches. It first raised the stake to 46 per cent and then to 51 per cent.
Prior to that, Oil and Natural Gas Corp (ONGC) held 46 per cent and MRPL 3 per cent in OMPL. The balance 51 per cent was yet to be allotted.
After the acquisition, OMPL became a subsidiary of MRPL and a Government companies under the Companies Act.
OMPL is jointly promoted by ONGC and MRPL for manufacturing 0.9 million tonnes per annum of paraxylene and 0.3 million tonnes of benzene from the aromatic streams of MRPL.
ONGC also holds 71.63 per cent stake in MRPL, which operates a 15 million tonne refinery at Mangalore in Karnataka. Hindustan Petroleum Corp Ltd (HPCL) has 16.96 per cent while the rest is with public.
Sources said OMPL has lot of synergies with MRPL and it makes better economic and business sense that this project be merged with MRPL.
ONGC holds 49 per cent stake in OMPL which is building a Rs 6,400-crore Aromatic Complex in Mangalore Special Economic Zone.
The Aromatic Complex, being set up on 442 acres of land acquired in Mangalore Special Economic Zone, is totally integrated with the adjacent MRPL refinery.
