Nocil seeks nod for preferential issue

MUMBAI, Oct 19: Nocil of the Arvind Mafatlal group is seeking shareholder approval to make a preferential issue of 8,24,58,340 equity sha...

MUMBAI, Oct 19: Nocil of the Arvind Mafatlal group is seeking shareholder approval to make a preferential issue of 8,24,58,340 equity shares of Rs 10 each in its demerged petrochemicals and polymer division PCD, Nocil Petrochemicals, to Shell Chemicals and Montell Polyolefins at a price of not less that Rs 29 per share.

Shell and Montell quot;will subscribe by themselves and/or through their nominees to 49 per cent equity of Nocil Petrochemicals, after the PCD business is demerged from Nocil and vested with Nocil Petrochemicalsquot;, according to the EGM notice to shareholders. The Nocil EGM has been scheduled for October 31.

The restructuring and division of Nocil8217;s business is being proposed to facilitate financial and technical support from Shell and its subsidiary, Montell. quot;Since Shell and Montell, who are interested in the business of the PCD, have desired an independent focussed company and to maximise shareholder value, it is proposed to restructure the company,quot; the notice adds.

Nocil shareholdersquot;will get shares of Nocil Petrochemicals in respect of their shareholding in the company according to the split ratio determined in terms of the proposed schemequot;.

Nocil has embarked on an expansion and modernisation programme of its petrochemicals and polymers complex at the Trans Thane Creek Industrial Area. The company proposes to modernise the naphtha cracker, which will substantially increase the capacities of ethylene and propylene.

The company says that it has executed technical collaboration agreements with foreign parties for know-how in respect of the main naphtha cracker and the downstream products. These parties have prepared the basic design engineering package which will help in putting up a state-of-the-art petrochemicals facility at the site.

The company had given the size and complexities of the above project, held negotiations with several potential partners and zeroed in on Shell Chemicals and Montell Polyolefins Company. quot;The proposal of Shell and Montell was considered to be in thebest interest of the company and its shareholders. The combined experience of Shell and Montell will ensure a speedier implementation of the project and lend a sound technical foundation to it,quot; the notice says.