Mumbai, Nov 2: Mangalore Refinery & Petrochemicals (MRPL), which has seen its interest cost in 1996-97 ballooning to Rs 308 crore from Rs 4 crore in the previous year, has decided to increase its borrowing limit by Rs 1,500 crore to Rs 6,500 crore.

The funds will be required to fund its long-term working capital needs and its ongoing expansion programme. The joint sector company, promoted by the AV Birla group and Hindustan Petroleum (HPCL), is trebling its refining capacity to 9 million tpa at an investment of Rs 3,690 crore.

The move to increase the borrowing limit by 30 per cent will require shareholders' approval, which will be taken at MRPL's annual general meeting next month. The two promoter groups hold 26 per cent each in MRPL's Rs 415-crore equity base.

The holding of both HPCL and the AV Birla group is set to go up to over 37 per cent till a public issue is made at a later stage. The company has made a private placement of fully convertible debentures (FCDs) to the two promoter groups, wherein they will have to bring in Rs 363 crore each.

The conversion price for the FCDs have been fixed at Rs 19.26 per share. The conversion can be made any time within 18 months of the date of allotment.The provisional retention margins for the refinery have now been fixed by the Oil Coordination Committee (OCC), following which the company's annual accounts for 1996-97 was finalised.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.