IOC may make presentation to Oil Ministry on IBP merger

4th November 2005: IOC is to make a fresh presentation before the Petroleum Ministry on the proposed merger of IBP Co Ltd with itself. Though the Union Cabinet had given its in-principle nod for the merger, it had expressed reservations on the proposed swap ratio requiring IOC to make a fresh presentation.

A senior IOC official said there could be a fresh presentation on the clarifications sought by the Cabinet. However, indications are that the company will defend the proposed swap ratio for the merger of IBP with IOC. The current swap ratio proposed by the boards of both the companies was 125 shares of IOC for every 100 IBP shares. The Cabinet had on October 20 had given its in-principle nod for the merger.

The Finance Ministry had raised questions on the swap ratio on the grounds that IBP had been over-valued. It had held that the merger would result in the reduction of the government stake in IOC. This had made the Petroleum Ministry ask IOC to get a second opinion.

Currently, the Government's stake in IOC is 82.03% with the remaining being held by the public, financial institutions and foreign institutional investors. At the end of March 2005, IOC held a 53.58% stake in IBP with foreign institutional investors, banks, mutual funds and the public holding the rest.

In the merger proposal, the Petroleum Ministry had suggested the creation of a trust. The proposed trust is expected to be similar to the Petroleum Trust created by Reliance Industries while merging Reliance Petroleum with itself. This merger route will help IOC avert the losses on its books. The merger plan has been designed to enable IOC to avoid booking losses on its investment in IBP.

Meanwhile, IOC was back in black in the second quarter ended September 30, 2005 posting a net profit of Rs 949.72 crore, after recording a loss in the first quarter of this fiscal. But the profits saw a sharp dip of 23% compared with the same period last year. IOC's subsidiary IBP losses went up by 212.9-per cent at Rs 190.53 crore during the second quarter of the current financial year against a loss of Rs 60.89 crore during the same quarter last fiscal.

Reliance Capital Asset Management Limited acquires 7.5% stake in Mold-Tek Technologies Ltd

3rd October 2005: Reliance Capital Asset Management Limited has acquired a 7.5% equity stake in Hyderabad-based Mold-Tek Technologies Ltd. The acquisition is through purchase of 6.63 lakh shares at Rs 45.02 per share in the open market. Mold-Tek managing director J Laxman Rao said that the Reliance acquisition was “just a mutual fund investment”.

Mold-Tek was planning a major expansion of both its packaging and BPO divisions, and was in talks with some of the possible investors to secure funds to part finance the expansion programme. “The talks in this regard have not yet been crystallised. The required funds can be now secured with the help of Reliance,” he said.

For the half year ending September 2005, Mold-Tek posted a turnover of Rs 35.80 crore and a net profit of Rs 1.66 crore as compared to the Rs 27.96-crore turnover and a profit of Rs 30 lakh in the corresponding period last fiscal. Rao said that the company was expected to end the current fiscal with a net profit of about Rs 4 crore.

According to Rao, Mold-Tek has started legal data support services from US law firms by establishing a 90-member BPO team. The total strength of the BPO outfit is poised to reach 200 by the end of this year. On the other hand, the company has recently started commercial production of its new packaging unit at Daman.

3i Infotech acquires US-based FormulaWare

3rd October 2005: 3i Infotech has acquired FormulaWare, a US-based software company. According to a release issued by 3i Infotech to the BSE today, FormulaWare provides enterprise resource planning (ERP) solution to the process industry, especially chemical and paint industries. "We look forward to extend our service to meet the specific enterprise planning needs of the lubricants, paints, inks and glues process manufacturing industries," V Srinivasan, managing director and CEO of 3i Infotech, said.