New Delhi, Aug. 28 (PTI): Close on the heels of buying out Aditya Birla group, Oil and Natural Gas Corporation (ONGC) is now planning to acquire equity stake of Hindustan Petroleum and financial institutions in Mangalore Refinery and Petrochemicals Ltd (MRPL).
ONGC, which acquired Aditya Birla group’s 37.39 per cent shareholding in MRPL for Rs 59.4 crore, has sent feelers to state-run refining and marketing company HPCL on its plans for the loss-making refinery, sources said.
The state-run exploration firm would have 51 per cent stake in MRPL after acquisition of ABG Equity and infusion of Rs 600 crore fresh capital. The consortium of 22 lenders led by ICICI, who have agreed to a financial restructuring package that includes conversion of part debt into equity, would have 21 per cent share capital while HPCL’s stake would fall to about 17 per cent from the current 37.39 per cent.
When contacted, ONGC chairman and managing director Subir Raha said, “We are looking at all opportunities” but did not give details.
Post buyout of ABG, MRPL would become a subsidiary of ONGC.
He said ABG and HPCL have written to the government for rescinding the June 1987 triparte MoU between HPCL, ABG and the government for setting up the joint sector 9 million-tonne refinery.
“We will restructure MRPL board after the Cabinet rescindes the MoU in the next couple of weeks,” he added.
While share sale / purchase agreement has been signed with ABG, shareholders agreement would be signed after the Cabinet approves the acquisition, Raha said.
ONGC would not be required to make an open offer after its acquisition of ABG Holding as one PSU was acquiring another.
Raha said post financial restructuring, the debt-equity ratio would come down from 9.91:1 to 2.51:1 and paid-up share capital would increase from Rs 725 crore to Rs 1700 crore.
About Rs 400-500 crore debt of FIs would be converted into equity, he said adding the ICICI-led consortium has agreed to reducing interest rate on about Rs 4,500 crore debt and moratorium of four years of payment of principle.
“We also have the option to pre-pay the loan without any penal interest,” he said.
After buying Aditya Birla group companies stake for Rs 2 a share, ONGC would inject Rs 600 crore as additional equity capital to take a controlling stake in MRPL, he said.
Besides, ONGC would infuse over Rs 300 crore as working capital in the loss-making refinery.
For the time being, ONGC would take management control of MRPL and restructure its board, Raha said adding HPCL would also be represented on the board.
ONGC has reached an understanding with HPCL on its taking over management control of MRPL.
To bid for HPCL, BPCL
ONGC today said it was interested in bidding for Bharat Petroleum and Hindustan Petroleum and demanded equal opportunity to participate in disinvestment of the state-run retailing companies.
“We are seriously looking at opportunities (in BPCL and HPCL). We expect the government will provide us equal opportunity as any other oil and gas company in the (disinvestment) process,” Subir Raha said. However, he did not elaborate.
While the government has allowed public sector companies like ONGC to bid for acquiring stake in state-run firms like Engineers India Ltd, the disinvestment ministry is learnt to be proposing barring PSUs from bidding for HPCL and BPCL.