All financing options open for HPCL deal: ONGC (Lead, correcting name in second para)

Oil and gas explorer ONGC on Sunday said that "all options" including internal accruals and short-term borrowing are available to fund its acquisition of HPCL.

"We have various options available with us to fund this deal," Shashi Shanker, Chairman and Managing Director of ONGC, told a press briefing here, a day after the

central government entered into an agreement with the oil and gas explorer for strategic sale of its equity share-holding in HPCL.

"There is an option of internal accruals... another option is of short-term borrowing and liquid assets... We will exercise the most beneficial option available with us."

According to Shanker, acquisition of the Central government's 51 per cent stake in HPCL worth over Rs 36,900 crore can also be done through the combination of various options available with ONGC.

"We have internal resources available with us which is around Rs 13,000 crore. We also have large shareholding in IOC (IndianOil) and GAIL and we can also borrow," Shanker said.

He pointed out that the acquisition is a "perfect fit" for ONGC as it will protect the oil and gas explorer against the volatility in crude oil prices.

"Whenever crude oil prices go up -- the bottomlines and the toplines -- of companies like ONGC improve and that of refiners like HPCL get impacted," Shanker said when asked about the synergies that the acquisition is expected to bring.

"... And when crude oil prices fall -- then the GRMs (gross refining margins) of refiners -- like HPCL improve and the bottomlines and the toplines of companies like ONGC get impacted. Thus this acquisition is a perfect fit... It will also enhance the value for minority shareholders."

--IANS

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