Sep 28: The government-owned ONGC is likely to shed its holding in Indian Oil Corporation (IOC) and GAIL. The move is aimed at funding its Rs 33,000-crore acquisition of HPCL.
ONGC has about 13.77 percent stake in IOC that translates to around Rs 26,450 crore. It also has 4.87 percent stake in GAIL, worth Rs 1,640 crore. Though ONGC has said that a final decision is ye to be taken with regard to stake sale in the two majors, t is likely that the company might go for it.
ONGC, according too reports, currently has Rs 10,000 crore of cash. As has been reported, it is a fully debt free company, and it has also received shareholders’ approval to raise Rs 25,000 crore through borrowing. A report quoting ONGC Chairman and Managing Director Dinesh K Sarraf said that ONGC has several options before it to fund the HPCL acquisition, and it being a debt free company, it can go in for market borrowing too.
With regard to the HPCL acquisition, ONGC feels that the deal could be closed this calendar itself. The state owned oil major hopes to pocket HPCL so that it can hedge its upstream oil and gas production risks with a presence in downstream oil refining and marketing business, a report added.