Jubilant sets up Dutch company for listing in London

Vol 11, PW 6 (26 Jul 07) People & Policy

No one at Jubilant will confirm it but the word is out that the Indian pharmaceutical giant is preparing to list its oil and gas business on the London Stock Exchange.

“Provided it happens,â€‌ confirms LSE spokesman Ibukun Adebayo, “the process (to list Jubilant’s shares on the London market) is at a very early stage. Any listing will require a lot of re-organisation for the (Jubilant) group in India.

â€‌ First among the requirements, says Adebayo, is for Jubilant to â€کre-domicile’ its oil and gas division to a jurisdiction outside India and seal its divorce from the balance sheet of parent company Jubilant Organosys, which finances the company’s exploration and production efforts to date. Second is for the new company to adopt the stringent IFRS (International Financial Reporting Standards) model in contrast to the more relaxed GAAP (Generally Accepted Accounting Principles) used in India.

“Converting your accounting procedures to IFRS is a laborious task and can take up to two months,â€‌ adds Adebayo. “Jubilant is still a long way away from a listing.

â€‌ Separate inquiries by PETROWATCH reveal that Jubilant has completed the first requirement by incorporating a company in Holland, long a favourite destination for start-up oil and gas companies. Called Jubilant Oil & Gas N.

V, it’s still unclear when the new company will complete the formalities enabling it to list on the LSE. “I’ve heard the listing is planned for September or October this year,â€‌ says a market source.

A senior Jubilant spokesman categorically denies the move to float is imminent. “People are speculating a lot,â€‌ he tells us.

“Nothing is clear of now. We are contemplating several options.

You need capital to fund growth. But whether this is through debt or a listing is undecided.

â€‌ Says another market source. “No one in Jubilant is saying much about this listing.

It’s all very hush-hush.â€‌ Unlike other companies with operations in India, such as Kolkata-based CBM operator Great Eastern and London-based Hardy Oil, Jubilant is planning a â€کPrimary Listing’ on the LSE and not the riskier Alternative Investment Market (AIM) for smaller companies.

Some 24 Indian companies, including Reliance and GAIL, have GDRs (Global Depository Receipts) traded on the LSE.