ONGC takes over HPCL, slated to be India's third-largest refiner
In a regulatory filing, state-owned Oil and Natural Gas Corp has informed that its board has given "in-principle" approval to acquire government's 51.11% stake in Hindustan Petroleum Corp Ltd. Its committee of directors will convene and, after examining various aspects of the acquisition, will give their recommendation to the board of directors. The government has already okayed the sale from its end. Here's more.
HPCL will take over Mangalore Refinery and Petrochemicals Ltd (MRPL) in order to bring India's largest oil producer, ONGC's every refining asset under one unit, said reports. Currently, HPCL has 16.96% and ONGC has 71.63% stake in MRPL. This sale relieves ONGC from going to the trouble of making an open offer to HPCL's minority stakeholder.
The stake sale is expected to go smoothly, as there will be no change in ownership, only the shift of a government holding to a state-run firm. It should ideally be completed within a year. Post-acquisition, HPCL will become an ONGC subsidiary. However, the company will not lose its bourse listing and its board will continue to remain active as it was before.
The center has formed a committee to work out the technicality of the sale. It has oil minister Dharmendra Pradhan and road minister Nitin Gadkari in it and is headed by Finance Minister Arun Jaitley. This acquisition of HPCL will provide ONGC with 23.8 million tonnes of annual oil refining capacity, making it India's new third-largest oil refiner after IOC and Reliance Industries.
