73rd Day Of Lockdown

Maharashtra77793336812710 Tamil Nadu2725614901223 Delhi250049898659 Gujarat18609126671155 Rajasthan98627104213 Uttar Pradesh92375439245 Madhya Pradesh87622772377 West Bengal68762768355 Bihar4452212028 Karnataka4320161057 Andhra Pradesh4112252971 Haryana3281112324 Telangana31471587105 Jammu and Kashmir3142104835 Odisha247814819 Punjab2415204347 Assam19894434 Kerala158969015 Uttarakhand115328610 Jharkhand7642975 Chhatisgarh6781892 Tripura6221730 Himachal Pradesh3691636 Chandigarh3022225 Goa126570 Manipur124110 Puducherry90330 Nagaland8000 Arunachal Pradesh3710 Meghalaya33131 Mizoram1710 Sikkim200
Business Companies 19 Mar 2018 IOC, BPCL may buy 26 ...

IOC, BPCL may buy 26 per cent stake each in GAIL

PTI
Published Mar 19, 2018, 10:34 am IST
Updated Mar 19, 2018, 10:34 am IST
Government has so far not taken any view on the proposals made by IOC and BPCL.
At Friday’s closing price of Rs 440.85 a share for GAIL on BSE, the stake is worth close to Rs 41,000 crore.
 At Friday’s closing price of Rs 440.85 a share for GAIL on BSE, the stake is worth close to Rs 41,000 crore.

New Delhi: State-owned Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) may buy 26 per cent stake each in gas utility GAIL India Ltd, paying the government over Rs 20,000 crore each to become integrated energy firms.

Following Finance Minister Arun Jaitley’s 2017 Budget announcement of creating integrated oil majors, IOC and BPCL had submitted separate proposals to buy the government’s 54.89 per cent stake in India’s biggest gas marketing and transportation firm, GAIL.

 

A top source said since the government was not looking at actual merger of oil companies but only transfer of its ownership to a cash rich PSU, the best option would be to split the 54.89 per cent holding in GAIL equally between IOC and BPCL.

At Friday’s closing price of Rs 440.85 a share for GAIL on BSE, the stake is worth close to Rs 41,000 crore.

In January this year, Oil and Natural Gas Corp (ONGC) bought out government’s 51.11 per cent stake in refiner Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore. But HPCL hasn’t been merged with ONGC and continues to remain a separate listed company with the same board. After the buyout, HPCL has become a subsidiary of ONGC, which gets up to two seats on the company board.

The source said IOC and BPCL too can follow the same model and split the government’s stake equally among themselves. GAIL will become their subsidiary and will continue to operate as a listed company with an independent board. IOC and BPCL would get to appoint one director each on GAIL board.

Like in case of ONGC’s acquisition of HPCL, the government would get to encash its holding in GAIL yet retain control over the company through IOC and BPCL.

The source said the government has so far not taken any view on the proposals made by IOC and BPCL. How and to whom the stake would be sold will be decided after inter-ministerial consultations, he said adding that the option of splitting the stake equally among the two firms is one of the options that would be considered during such deliberations.

Jaitley in the 2017-18 Budget had unveiled government’s plan to create integrated public sector oil majors “through consolidation, mergers and acquisitions” so as that the merged company has “capacity to bear higher risks, avail economies of scale, take higher investment decisions” and is “able to match the performance of international and domestic private companies?.

Following this, ONGC expressed interest in taking over HPCL while IOC and BPCL said they keen on taking over GAIL to help add natural gas transportation and marketing business to their kitty.

...
Location: India, Delhi, New Delhi




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT