Kolkata May 1 The Union Ministry of Company Affairs has approved the merger of IBP Ltd with IOC. The merger may be effective from May 2 following submission of due requests before the Registrar of Companies.
The merger is expected to inflate the gross sales of IBP by approximately 10 per cent. IBP posted a turnover of net profit of Rs 15,818 crore and Rs 1,244 crore respectively in 2005-06. IOC recorded a turnover of Rs 1,76,339 crore and a net profit of Rs 4,915 crore.
"We have received the due clearance from the Union Ministry of Company Affairs on April 30 and will approach the registrar of companies (RoC) for the same", Mr V.C. Agarwal, Managing Director of IBP and Director-HR of IOC, told Business Line.
While Mr Agarwal did not clarify the effective date of merger, a senior IOC official said that it would be effective from May 2. Both the companies would approach the RoC on Wednesday in this regard.
Company sources revealed that IOC has issued a notice, declaring that the IBP board will be dissolved with effect from May 2 and IBP Ltd will, henceforth, continue as a division of IndianOil.
IOC acquired the Union Government's 33.58 per cent stake in IBP in 2002. The merger was delayed due to several reasons including differences over swap-ratio — which was finally pegged 1.1:1 or 11 shares of IOC for every 10 IBP shares — and last minute investors' complaints.
While the merger was delayed, the company has integrated operations of both the companies beginning April 1, with an executive director of IOC put in charge of IBP operations.
Accordingly, IBP started sharing the supply logistics of IOC. Also IBP lube blending capacities are brought to common use of both the companies.
Once the merger is effected, 30 divisional offices of IBP will be wound up and the available infrastructure will be used for other purposes. Also on the cards is re-deployment of manpower between both the companies