HPCL wants ONGC to cut stake in MRPL -Governance Now

HPCL wants ONGC to cut stake in MRPL

HPCL is one of the original owners of MRPL along with the Aditya Birla group, both owning 37.4 percent each in the refiner.

GN Bureau | September 12, 2016

#HPCL #ONGC #Aditya Birla group #MRPL #shareholding norms

State-run Hindustan Petroleum Corp. Ltd (HPCL) wants Oil and Natural Gas Corp. Ltd (ONGC) to divest a part of its stake in the Mangalore Refineries and Petrochemicals Ltd (MRPL) so that it can meet minimum public shareholding norms.

At the end of June, HPCL held a 16.95 percent stake in MRPL, and ONGC, the other promoter, owned 71.6 percent. The public shareholding in MRPL was 11.42 percent, less than 25 percent which is prescribed by the Securities and Exchange Board of India (SEBI), according to a news report published in Live Mint.

At MRPL’s annual general meeting held early this month, the company said it authorised its board “for exercising any of the options available” to meet SEBI’s public shareholding norms.

The options available include divestment of the promoters’ shareholding through an offer for sale or issue of fresh shares by MRPL through a public offer. But HPCL prefers that ONGC sell a part of its stake rather than having its own stake diluted.

HPCL is one of the original owners of MRPL along with the Aditya Birla group, both owning 37.4 percent each in the refiner. In 2003, ONGC bought out the latter’s stake in the loss-making company, the news report added.

Through successive rounds of restructuring and infusion of fresh capital, ONGC gradually increased its holding to 71.6 percent.

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