ONGC acquires 51.11% stake in HPCL

The objective of acquisition is aimed to give CPSEs capacity to bear higher risks, avail economies of scale, take higher investment decisions

GN Bureau | January 22, 2018


#ONGC   #HPCL   #PSU  

In its bid to create an oil major to match the performance of global and domestic oil and gas players, Oil and Natural Gas Corporation Ltd (ONGC) board has approved the acquisition of entire 51.11 percent shareholding of the government in Hindustan
Petroleum Corporation Ltd (HPCL) with a total acquisition cost of Rs 36,915 crore on January 19.

ONGC has entered into a share purchase agreement with the government for acquiring the 778,845,375 equity shares of HPCL on January 20, 2018. The PSUs expect to complete the transaction before end of January 2018.

The SEBI has granted an exemption from the application of Regulation 23 of the Listing Obligations and Disclosure Requirements Regulation 2015 (LODR) to the ONGC for the transaction. Requisite approval from the shareholders of ONGC for the related party transaction will be sought by ONGC after the execution of the share purchase agreement.

The acquisition is aimed to achieve the government’s objective to combine the various CPSEs to give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders and create an oil major which will be able to match the performance of international and domestic private sector oil and gas companies.

ONGC expects, as an integrated oil company, its performance will be less affected by the volatility of crude prices due to diversification of its cash flows to midstream and downstream presence through HPCL, lower earnings volatility, diversified cash flows and lower business risk resulting in better valuation and higher shareholder value.

HPCL and ONGC have a complimentary asset portfolio and through this acquisition, the latter is gaining a midstream and downstream presence and access to a marketing network. ONGC will also gain access to marketing network of HPCL which could be synergistically utilised for projects such as MRPL, OPaL.

Comments

 

Other News

Tech firm, telcos prepare to enter 5G era

As the government is set to roll out the 5G spectrum auction, the network providers are also equipping 5th generation network-ready LTE technology.  According to the government, the technology would have an impact of more than $1 trillion on the Indian economy. It is also expected to transform educati

On a personal note: Rabbi Shergill

Punjabi singer, songwriter, and guitarist, Rabbi Shergill rose to fame in 2004 with his chartbuster song ‘Bullah Ki Jaana’ from his debut album ‘Rabbi’. Inspired by rock and Punjabi folk music, he uses Punjabi language to create acoustic rock-based ballads. His poetic and social

NALCO registers Rs 589 crore operating profit in Q3 of 2018-19 FY

National Aluminium Company Limited (NALCO), country’s leading manufacturer and exporter of alumina and aluminium, has posted an operating profit of Rs 589 crore in Q3 of 2018-19 FY, registering 80 percent growth over the same period of last year.   Net profit of the company

Many electronic companies still have no take-back system: Report

In 2016, 44.7 million tonnes of e-waste was generated globally which is expected to increase to 52.2 million tonnes in 2021. As of 2016, it was found out that India is the second and fifth highest generator (in Asia and globally respectively) of e-waste with 2 million tonnes. The mounting pile of e-waste h

India’s per capita power consumption likely to grow by two fold, says power minister

Union power minister RK Singh has said the per capita current power consumption of 1,200 units is expected to grow 2-3 times at par with the international consumption after every Indian gets access to electricity. Singh said the power sector is witnessing an increased demand which is further expect

Net profit of Rs 616 crore posted by SAIL in Q3 of 2018-19

SAIL has posted a profit (profit after tax) of Rs 616 crore in Q3 of 2018-19 FY. SAIL has managed to better its performance over the previous quarter as well by more than 11 percent when it stood at Rs 554 crore. The turnover for Q3 FY’19 improved by three percent over corresponding period of

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter