ONGC board gives in-principle approval to acquire 51.11 percent stake in HPCL

The board of state-owned Oil and Natural Gas Corp (ONGC) on Monday gave 'in-principle' approval to acquire government's 51.11 percent stake in Hindustan Petroleum Corp Ltd, the company said in a regulatory filing.

PTI August 21, 2017 22:36:54 IST
ONGC board gives in-principle approval to acquire 51.11 percent stake in HPCL

New Delhi: The board of state-owned Oil and Natural Gas Corp (ONGC) on Monday gave 'in-principle' approval to acquire government's 51.11 percent stake in Hindustan Petroleum Corp Ltd, the company said in a regulatory filing.

The board at its meeting on Monday constituted a committee of directors to "examine various aspects" of the acquisition and "to provide its recommendations to the board of directors", it said.

ONGC board gives inprinciple approval to acquire 5111 percent stake in HPCL

Representational image. Reuters

The government last month had approved the sale of its 51.11 percent stake in oil refiner HPCL to India's largest oil producer ONGC.

Prior to the merger, HPCL is likely to take over Mangalore Refinery and Petrochemicals Ltd (MRPL) to bring all the refining assets of ONGC under one unit. ONGC currently owns 71.63 percent of MRPL while HPCL has 16.96 percent stake in it.

Sources said ONGC will not have to make an open offer to minority shareholders of HPCL as the government's holding is being transferred to another state-run firm and the ownership isn't changing.

The deal will be completed within a year, he said.

HPCL will become a subsidiary of ONGC and will remain a listed company post the acquisition, the source said adding the board of the refining and marketing company will continue to remain in place.

The government has also constituted a committee, headed by Finance Minister Arun Jaitley and comprising oil minister Dharmendra Pradhan and road minister Nitin Gadkari to work out the modalities of the sale.

Jaitley had in his Budget for 2017-18 talked about creating an integrated oil behemoth. After that, oil companies were asked to give their options.

ONGC had evaluated options of acquiring either HPCL or BPCL, the two downstream oil refining and fuel marketing companies.

It found the nation's second-biggest fuel retailer BPCL too expensive and conveyed its choice to the parent oil ministry.

Sources said the transaction is likely to be completed within this fiscal year.

HPCL will add 23.8 million tonnes of annual oil refining capacity to ONGC's portfolio, making it the third-largest refiner in the country after IOC and Reliance Industries.

Updated Date:

also read

India's oil imports from Iran hit eight-month low
Business

India's oil imports from Iran hit eight-month low

India's January-November imports from Iran shrank by about a quarter to 206,000 bpd, dragged down by deep cuts in shipments by New Delhi in the first quarter of 2015 under pressure from the United States to keep its imports within the limits of sanctions.

Govt plans to fill strategic petroleum reserve by third week of May; to help refineries reduce excess crude
Business

Govt plans to fill strategic petroleum reserve by third week of May; to help refineries reduce excess crude

India plans to completely fill its strategic petroleum reserve (SPR) by the third week of May by moving about 19 million barrels into the sites by then, the managing director of the country’s SPR said on Tuesday

India should reduce or stop crude oil import from Iran, increase dependence on Saudi Arabia, Iraq: Moody's
World

India should reduce or stop crude oil import from Iran, increase dependence on Saudi Arabia, Iraq: Moody's

Indian refiners will either have to significantly reduce or completely stop importing crude oil from Iran over the next month, increasing their dependence on other West Asian suppliers like Saudi Arabia and Iraq, Moody's Investors Service said.