ONGC buys Imperial Energy for $1.9 bn

Oil and Natural Gas Corporation (ONGC) has taken control of Imperial Energy Plc for 1.3 billion pound ($1.9 billion) after an overwhelming 96.8 per cent of London-listed firm's total shareholders accepted its takeover offer.

The deadline for the state-owned firm's 12.50 pounds per share offer closed yesterday and 99,241,110 or 96.8 per cent of the shares were tendered, ONGC Videsh (OVL) informed the London Stock Exchange.

ONGC Chairman R S Sharma said the company owed the acquisition to the government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam.

OVL, the overseas arm of the state explorer, needed 90 per cent shareholders to approve its deal, which will result in delisting of Imperial.

Imperial will be delisted from LSE after it "squeezes out" the remaining untendered shares by posting them cheques of the offer amount and telling the shareholders that these untendered shares were no longer valid.

Imperial, the Leeds-based firm that has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan, would be the biggest overseas ever acquisition by OVL.

It had paid $1.7 billion to buy a 20 per cent stake in Exxon Mobil Corp's Sakhalin-I field in Russia and $785 million for a stake in the Greater Nile project in Sudan, both in 2003.

OVL will fund the transaction through a combination of loans from the parent company worth $1 billion-equivalent rupee loan. ONGC would lend close to $1-billion to fund the transaction at 5.96 per cent interest rate.

The entire acquisition and subsequent delisting may take two to three weeks, the source added.