Chevron will pay Rs 3.95 crore to IAL which will issue fresh equity at a premium of Rs 107 for every share of Rs 100 face value, IAL chairman S Ram Mohan told reporters here. This would enable Chevron Chemicals to bring in more funds for technological upgradation and be more competitive in the additive technology sector, which had become highly competitive with the gradual reduction in import tariffs, S Srinivasan of MRL said.

The agreement with reference to the reduction of MRL's stake in IAL was signed today along with four other agreements including restructuring of the board, technology upgradation, and trade mark agreement which would enable ial to use Chevron's name.

IAL managing director Thorpe said the main aim of the IAL, which has a market share of 30 per cent, was to compete with its main rival Lubrizol by bringing down its prices. For this, infusion of more capital would be required as the sector was going to be very competitive in future.

With this agreement, Chevron, which hitherto had two members in the IAL board, would have three. However, MRL would continue to have the right to nominate the managing director of IAL, Srininvasan said.

Sreenivasan said the new changes in IAL would not affect the labour force of the company.