State-owned Indian Oil Corp will invest Rs1,000 crore for raising stake in Chennai Petroleum Corporation ltd by subscribing to preferential issue. Shareholders of CPCl have decided to increase authorised share capital of the company from Rs400 crore (40 crore shares of Rs10 each) to Rs1,400 crore, the company said in a regulatory filing. Through a postal ballot, shareholder agreed “for issue of 100 crore non-convertible cumulative redeemable preference shares of Rs10 each for cash at par amounting to Rs1000 crore on private placement preferential allotment basis, in one or more tranche to IOC,” it said.
The increased share capital would be by way of creation of 100 crore preference shares of Rs10 each. The enhanced share capital of the company would thus comprise of 40 crore equity shares of Rs10 each and 100 crore preference shares of Rs10 each. IOC currently holds 51.89 per cent in CPCl, while the other promoter, Iran's Naftiran Inter Trade Company ltd, owns 15.40 per cent. The preference allotment is being done only to IOC and not to the Iranian firm.