Oil and Natural Gas Corporation (ONGC), the country’s largest oil and gas producer, today completed the acquisition of government-owned fuel retailer Hindustan Petroleum (HPCL) through an all cash deal worth Rs 36,915 crore, the PSU said...
in a Bombay Stock Exchange (BSE) filing.
The PSU had tied up Rs 35,000 crore with seven banks including three private and four public sector banks to fund the acquisition. While ONGC has secured loans for Rs 35,000 crore through banks, the details of funding the rest of the acquisition amount, Rs 1,915 crore, are not in public domain.
The combined market value of ONGC and HPCL is estimated to be around Rs 311,925 crore (US dollar 49 billion).
The board of ONGC had on 19 January approved the acquisition of the entire 51.11 per cent shareholding (778,845,375 equity shares) of the President of India, at a cash purchase consideration of Rs 473.97 per share. The PSU entered into the share purchase agreement with the President on 20 January. The acquisition of HPCL by ONGC has paved the way for the merger of the two big oil PSUs. Earlier, Finance Minister Arun Jaitley, in his budget speech last year, had announced the government’s plan to consolidate and integrate oil and gas PSUs.
So exactly one year after Jaitley announced about the move, ONGC-HPCL merger became a reality.
The transaction remains subject to requisite approvals from the shareholders of ONGC. Shares of ONGC closed 0.22 per cent down at Rs 203.35 on Wednesday, while HPCL settled 1.07 per cent up at Rs 396.50 as compared to previous close. The announcement was made by ONGC post market hours.
Shares of ONGC closed 0.22 per cent down at Rs 203.35 on Wednesday, while HPCL settled 1.07 per cent up at Rs 396.50. The announcement was made by ONGC post market hours. Rating agency Moody's on January 30 had affirmed ratings for state-run ONGC as 'stable' following the oil major's recent acquisition of majority shareholding in HPCL, as reported by a news agency. The transaction remains subject to requisite approvals from the shareholders of ONGC.