GOVERNMENT AND RELIANCE SIGN THREE AGREEMENTS FOR CONCLUSION OF
DISINVESTMENT PROCESS OF IPCL
The Government of India and the strategic partner
M/s Reliance Petroinvestments Ltd./RIL/Depository/Depository Participant
signed three agreements for the conclusion of the disinvestment
process of IPCL, here today. These are – Shareholders Agreement;
Guarantee Agreement and Extension of Transfer Restriction Agreement.
Shri Ashok Chawla, Joint Secretary in the Ministry of Chemicals
and Fertilizers who is also the erstwhile CMD of IPCL signed the
Agreements on behalf of the Government and Shri K. P. Nanavaty
signed on behalf of Reliance.
Government has sold 64,538,662 shares constituting
26% equity of the IPCL at a rate of Rs. 231/- per share to M/s
Reliance Petroinvestments Ltd. The Government received an amount
of Rs. 1490,84,30,922 (One Thousand Four Hundred Ninety Crore
Eighty Four Lakh Thirty Thousand Nine Hundred Twenty Two) towards
the sale of the above shares. After disinvestment, the Government
would still be holding 84,261,338 shares of the IPCL, which constitute
33.945%. The Government had on May 18, 2002 accepted M/s Reliance
Petroinvestments Ltd. as the strategic partner on the basis of
bids received for disinvestment of 26% equity of IPCL held by
the Government. Pursuant to the above decision, the Share Purchase
Agreement was signed on May 21st, 2002 by the Government
of India, IPCL and M/s Reliance Petroinvestments Ltd.
On disinvestment, the control of management of
the company will be passed on to the Strategic Partner. The existing
Board of Directors would be dissolved and the Strategic Partner
will reconstitute a new Board for IPCL, which will consist of
12 Directors – six to be nominated by the Strategic Partner including
the Managing Director, two Directors (Non-Executive) to be appointed
on the recommendation of the Government and the remaining four
Directors would be independent Directors. As per the Share Purchase
Agreement, the Strategic Partner shall not directly or indirectly
sell or transfer any of such purchased shares to any person for
a period of three years. In the third year of signing of the Agreement,
the Government shall have the right to sell all or any of the
voting equity shares of the company, which are owned by the Government
at that time at the fair value to the Strategic Partner.
Shareholders Agreement stipulates that the Strategic
Partner shall not retrench any of the employees for a period of
one year from the closing date other than any dismissal or termination
of employees in accordance with the applicable staff regulations
and standing orders of the company. In the event of reduction
in the strength of employees, the Strategic Partner shall ensure
that the company offers to its employees the option to voluntarily
retire on terms that are not in any manner less favourable than
any VRS offered by the company on or prior to the closing date.
