Chennai, Aug 1: The merger ratio of Spic Organics Ltd and Manali Petrochemicals, both belonging to the Spic group of companies, has been fixed at 1:1. The board of Spic Organics has approved of the merger in principle. The proposal now awaits the approval of Tidco, a state developmental institution which has an equity stake in Spic Organics.Basically, Spic Organics and Manali Petrochemical have the same product mix - propylene glycol and polyol. The raw material for this is propylene oxide which is sourced from Chennai Petroleum Corporation Ltd (CPCL). The two plants also have similar production capacities of 12,000 MT/annum, though Manali Petro has got the facility to enhance production on existing capacities. However Tidco is a shareholder in Spic Organics shareholding unlike Manali Petro, which is also a listed company with a fair percentage of institutional and public holding apart from the principal promoter Spic.
Both plants were commissioned at about the same time and are located close to each other, with the convenience of sourcing raw material from the adjacent CPCL.
Both the companies are not doing well on account of irregular supplies of raw material from CPCL (the production for polypropylene oxide is still closed).
Both Manali Petro and Spic Organics have been managing with difficulty on existing stocks.
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