Shirish Nadkarni
OGJ Correspondent
MUMBAI, Oct. 12 -- Royal Dutch Shell PLC reported it will purchase the 49% equity stake in lubricant marketing firm Bharat Shell Ltd. (BSL) from its joint venture partner, Indian state-run refiner Bharat Petroleum Corp. (BPC), for $36.5 million. Shell holds the remaining 51% equity and management control in BSL.
In addition to paying BPC 1.46 billion rupees in cash, Shell will assume BPC's 49% share of the company's debt—3.12 billion rupees ($78 million) as of Mar. 31, 2006.
The BSL JV was floated in 1993 to market Shell-branded lubricants in India and to strengthen BPC's position blending and marketing speciality lubricants. BPC said it is exiting the JV mainly because it has developed a similar product and both companies recognized the need for building their brands independently in India.
BSL incurred losses until 2001-02 but showed signs of a turnaround after dropping its unprofitable liquefied petroleum gas business, and the company posted a net profit of 121.2 million rupees ($3.03 million) in 2006-07.
The Shell board of directors approved the purchase agreement May 10, and India's Cabinet is evaluating the sale.
After the acquisition, Shell will remove "Bharat" from the BSL name.
