It is believed that Shell Montell, a subsidiary of Shell, is preparing to pick up an equity stake in the company through a hefty preferential allotment, allowing the giant multinational corporation a substantial presence in the once-bluechip in which it had held a 30 per cent stake till 1992, a stake it sold out to the Mafatlals to make a clean exit.

The new stake is believed by insiders to be worth about Rs 185 crore, at a price slightly higher than Rs 65 per share. Roughly, this would work out to an addition of Rs 27 crore to the equity of the company (Rs 122.6 crore), and a stake for Shell of between 17 per cent and 18 per cent in the expanded equity. However, this could not be confirmed since none of the Nocil executives was available for comment.

If the preferential allotment transpires, thiswill also create space on the Nocil board for two new Shell representatives, and it is believed, that Shell executives Jean Mitchell Couteau and Ven Den Berf may represent the MNC on the Nocil board as "members incumbent", say sources. It is believed that Couteau was in the city yesterday to interact with the Nocil management on modalities.

It is believed that even though Shell is considering a substantial equity chunk in Nocil, in case it does enter the company, it may not continue to operate the existing cracking facilities of the company, but will construct an ethylene cracker with a capacity of 90,000 tonnes per annum, according to the blueprint of equity partnership under consideration, which may be completed only by 2001. It is believed that the polyvinyl chloride operations may not be at the focus of Shell's proposals.

It is learnt that one of the options under consideration of financial institutions is that a process of de-merger of the constituent units of the company, into petrochemicals, rubberchemicals and polymers, is feasible provided the buyers to whom the units go to are ready to provide the required countervailing guarantees against the outstanding institutional dues of the various divisions.

It was earlier reported that Shell would take over the petrochemicals unit and Apollo Tyres the rubber chemicals division.

Nocil is holding its annual general meeting in Mumbai on Wednesday, where it is expected to discuss the company's performance and various mentions in the media of proposed sell-off plans.

Speculation has been rife in the media on the Mafatlals' plans for the company. The option most talked about is one of de-merger of divisions into separate companies, followed by their sale to different equity investors. All such references in the media have been denied by Nocil in the past.

Nocil used to be a major petrochemical company in the early days of the industry in India. But in recent years, with falling product prices and less than optimum capacity, the company has been hamstrungfor growth, sparking off these rumours of a possible sellout.