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ONGC board approves HPCL takeover, constitutes panel to examine acquisition

The government last month had approved the sale of its 51.11% stake in HPCL to ONGC

Press Trust of India  |  New Delhi 

A technician is pictured inside a desalter plant of ONGC on the outskirts of Ahmedabad. Photo: Reuters

The board of state-owned Oil and Natural Gas Corporation (ONGC) on Monday gave 'in-principle' approval to acquire government's 51.11 per cent stake in Hindustan Petroleum Corporation (HPCL), the company said in a regulatory filing.

The board at its meeting on Monday constituted a committee of directors to "examine various aspects" of the and "to provide its recommendations to the board of directors", it said.

The government last month had approved the sale of its 51.11 per cent stake in oil refiner to India's largest oil producer

Prior to the merger, is likely to take over Mangalore Refinery and Petrochemicals (MRPL) to bring all the refining assets of under one unit. currently owns 71.63 per cent of while has 16.96 per cent stake in it.

Sources said ONGC will not have to make an open offer to minority shareholders of HPCL as the government's holding is being transferred to another state-run firm and the ownership isn't changing.

The deal will be completed within a year, he said.

HPCL will become a subsidiary of ONGC and will remain a listed company post the acquisition, the source said adding the board of the refining and marketing company will continue to remain in place.

The government has also constituted a committee — headed by Finance Minister and comprising oil minister and road minister to work out the modalities of the sale.

Jaitley had in his Budget for 2017-18 talked about creating an integrated oil behemoth. After that, oil were asked to give their options.

ONGC had evaluated options of acquiring either HPCL or BPCL — the two downstream oil refining and fuel marketing

It found the nation's second-biggest fuel retailer BPCL too expensive and conveyed its choice to the parent oil ministry.

Sources said the transaction is likely to be completed within this financial year (FY).

HPCL will add 23.8 million tonnes of annual oil refining capacity to ONGC's portfolio, making it the third-largest refiner in the country after IOC and

First Published: Mon, August 21 2017. 23:23 IST