State Govt. forestalls IPCL attempt to gain control of port project

22-Aug-05

IPCL, under the umbrella of Reliance Industries, has made a fresh attempt to obtain GCPTCL by acquire equity from Gujarat Alkalies and Chemicals Limited (GACL) and Gujarat State Fertilisers and Chemicals Limited (GSFC). Over the past 2 years, Indian Petrochemicals Corporation (IPCL) has invested more than Rs 45 crore in equity of Gujarat Chemicals Port Terminal (GCPTCL). This investment can be split as Rs 35.98 crore in 2004-05, and Rs 10 crore in FY03-04. But his increase in investment amount has not lead to an increase in equity stake, which has remained constant at 42%. This can be attributed to the fact that the remaining 58% equity stakeholders in GCPTCL, (including various other state-owned companies) have also raised their equity investment in GCPTCL, in direct proportion to their stake. IPCL's equity investment is believed to be part of GCPTCL's debt-structuring exercise. Reliance and IPCL are estimated to account for 70% of GCPTCL's business. Enjoying the advantage of proximity of IPCL's Dahej cracker with GCPTCL terminal, IPCL currently uses some of the GCPTCL facilities. Propane and naphtha storage tanks are also mainly used by IPCL for either Dahej as well as Baroda unit.