Gulf Oil Corporation Ltd has decided to dilute 90 per cent stake in GHCL London Ltd, United Kingdom, a special purpose vehicle formed by the company to facilitate the acquisition of the US-based Houghton International Inc.
The dilution of stake would be by infusion of fresh equity by Gulf Oil International Ltd based in Cayman.
The Hyderabad-based company informed BSE that the board of directors of the company recently, subject to customary closing conditions and regulatory and other approvals, as applicable, plans to go ahead with the stake dilution process.
With the proposed equity infusion, the said group company GHGL along with its all the step down subsidiaries including Houghton International Inc will cease to be subsidiaries of the company once the process is completed.
In the meantime, Gulf Oil International Ltd, Cayman, has prepaid $120 million out of $300 million loan obtained for the said purpose by HGHL Holdings Ltd (HGHL), UK, the wholly owned subsidiary of the company.
It has agreed to take full responsibility of servicing and repayment of entire balance outstanding loans. This exercise is aimed at de-risking the listed entity in India.
In December 2012, Gulf Oil Corporation Ltd completed the acquisition of speciality oil company Haughton International Inc, (for about a $1 billion).
Gulf Oil shares were trading at Rs 75.50, up 8.5 per cent at BSE during the day.