Amoco to pay Rs 350 a share for Castrol stake

Our Corporate Bureau

Mumbai, Aug 8: The Mumbai High Court has directed BP Amoco to pay Rs 350 per share to shareholders for acquiring 20 per cent of the equity shares of Castrol India. BP Amoco has also been directed to pay interest at the rate of 15 per cent per annum for delay beyond March 14, 2000.

BP Amoco’s total liability for acquiring the stake under the open offer has been pegged at around Rs 864.03 crore. Apart from this, the interest thereon for the delay would be in excess of Rs 100 crore per annum. The open offer should have been made by the company around March 2000 and the delay in payment to shareholders is already over a year.

However, the company will be allowed a grace period of four months, which would be required for completing the formalities under the Takeover Code. BP Amoco has given an undertaking to the high court that they would make the open offer within 21 days of the date of judgement. The company has also agreed to furnish a bank guarantee to cover the interest that would be payable as per the decision of the court.

BP Amoco (India) associate president Clyde D’Mello said that the company would make the open offer as soon as the legal and banking formalities are through with the Securities and Exchange Board of India (Sebi). On the interest rate to be paid to the shareholders, he said that the company has to discuss the issue.

Meanwhile, Mr Abhishek Dalmia of the AH Dalmia group, also a shareholder of Castrol, has written to the Sebi Appellate Tribunal stating that any delay in deciding that matter would result in BP Amoco gaining at the cost of small shareholders. BP Amoco and Castrol UK in May this year had decided to move the Bombay High Court against the Sebi ruling directing it to revise the offer price of Castrol India Ltd shareholders to Rs 350 per share on the ground that the relevant date for the offer was March 14, 2000, instead of July 7, 2000.

Castrol UK and BP Amoco had earlier contested Sebi order before the Securities Appellate Tribunal. The companies, through a public announcement on December 11, 2000, had declared their intention to make an open offer for 20 per cent of Castrol India’s issued equity share capital at Rs 311.91 per equity share, payable in cash. On January 24, 2001, the companies had informed the shareholders that Sebi had advised Castrol UK to await comments on the draft letter of offer.