The Mafatlals presently hold 42 per cent of the Rs 85-crore equity capital of Nocil Petrochemicals. With allotment of shares on a preferential basis to the joint venture partner Bashell - in accordance with the joint venture agreement signed two years back - the capital of Nocil Petrochemicals will increase to Rs 120 crore. This will enable the multinational to pick up a 49 per cent stake in the company, while the Mafatlal holding would come down to 20 per cent.

Over a period of five to six years the company plans to issue more capital which will enable Bashell and other shareholders to subscribe to the fresh issue of shares and raise the capital to Rs 1,500 crore. This will also enable Bashell to increase its holding in the company.

The Mafatlals would, however, abstain from subscribing so as to gradually bring down their holding in the company to a minimum of four to five per cent. This marginal holding will eventually be offloaded, the officials said.

Nocil Petrochemicals will take charge of implementing the Rs 6,500-crore naphtha-based cracker project at Thane-Belapur in the outskirts of Mumbai.

The project will have an equity component of Rs 1,500 crore and a debt of Rs 5,000 crore. The project has suffered delays due to paucity of funds.

The officials said Bashel will ultimately hold Rs 1,300 crore equity in Nocil Petrochemicals. The balance Rs 5,000 crore will be brought in by way of debt. Financial institutions, which hold part of the equity, will also infuse funds into the project.

The trifurcation of Nocil - which will yield Nocil Petrochemicals, Nocil Rubber Chemicals and Nocil Ltd - is expected to get the final clearance from the Bombay High Court by the end of this calendar year, the officials added.

This would pave the way for the Mafatlals, who are currently reeling under financial problems, to accomplish Mafatlals to exit from Nocil Petrothe restructuring and raise funds.

While Bashell will initially bring in Rs 300 crore by way of picking up a stake in the petrochemicals joint venture, Apollo Tyres will infuse funds by buying out a controlling stake in the rubber chemicals joint venture - Nocil Rubber Chemicals. Nocil Ltd will be the residual company of the Mafatlals, who plan to go it alone.

Company officials said that while at present the market for petrochemicals was limited, in the next five to six years, when the project goes on stream, the demand for petrochemicals was expected to rise to levels of the companies production ability.

As per the trifurcation plan, Nocil's share capital of Rs 122 crore is to be split in the ratio of 70:16:14 between its petrochemicals, rubber and residual business which is also roughly the ratio of their contribution to the then Nocil turnover of Rs 1,100 crore.

The three-way restructuring of Nocil, which has already got the shareholders approval, will be with retrospective effective from October 1, 1998. The demerger will result in Nocil shareholders getting free-of-cost one new share each in the two new companies formed by the spin-off of Nocil's petrochemicals and rubber business for every single Nocil share held.