IDBI, IDBI Bank merger meet on Jan 20

19th January 2005: The board of state-run Industrial Development Bank of India will meet on January 20 to discuss terms of a proposed merger with IDBI Bank, a company it founded, the Bombay Stock Exchange said today.

BPCL okays 2.25:1 ratio for KRL merger

18th January 2005: The Bharat Petroleum (BPCL) board on Monday cleared the swap ratio for the merger of Kochi Refineries (KRL) with itself. The ratio was decided at 2.25:1, i.e., a KRL shareholder would get one BPCL share for every 2.25 KRL shares. This is the second big merger in the consolidation process among oil companies. The first was that of Indian Oil with the Kolkata-based oil marketing company IBP, where the ratio was 1.25:1. Both mergers are expected to be completed in the second quarter of 2005-06. BPCL already holds a 54.81% stake in KRL. The move will result in savings of Rs 200 crore, on sales tax, for the company. The merger will strengthen KRL’s model from a pure refiner to integrated operations, while it will enhance BPCL’s captive refining capacity to 16m tonnes per annum (post-merger), closer to its market share in the domestic oil retailing business. Analysts said the merger would lend greater stability to BPCL’s earnings in times of high refining margins and pressure on marketing margins. It will also partially resolve the tricky issue of central sales tax (CST) for KRL, since BPCL buys about 50% of BPCL’s output. KRL has a problem of CST under-recovery to the tune of Rs 180 crore annually.

Aiboa against the merger of public sector banks

12th January 2005: All India Bank Officers' Association on Wednesday said it would not allow any change in the independent character of the 27 public sector banks and oppose any move for their merger or acquisition. A meeting of United Forum Of Bank Unions (UFBU) would be held soon to discuss these issues, General Secretary of Aiboa, R J Sridharan, said. He said the Indian banking Industry was capable of meeting any international challenge and therefore merger of these banks was not necessary.

While the private banks were not willing to implement government-sponsored schemes, public sector banks had not only discharged social obligations by operating in rural India but also implemented such schemes, he said. The UPA allies were also not supporting Finance Minister P Chidambaram’s statement on merger and acquisition of the PSU banks, "as they knew the repercussions of such a step", he said.