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Merger with MRPL should happen at earliest, says HPCL

Press Trust of India  |  New Delhi 

Corp Ltd (HPCL) today said its merger with Refinery and Petrochemicals Ltd (MRPL) should happen at the earliest as there exist lot of synergies between them.

Oil and (ONGC), India's biggest oil and gas producer, last month completed the acquisition of HPCL for Rs 36,915 crore.

After this takeover, ONGC has two refining subsidiaries - HPCL and MRPL.

HPCL said it makes sense to bring the two companies under one fold.

However, no discussion has yet been initiated on the merger, he said, adding that the board of ONGC, HPCL and MRPL would consider such a proposal once discussions and modalities of the merger have been worked out.

"I believve that if there is a value (in the merger), it should be created at the earliest," he said.

For one, HPCL sells more than it produces and bringing MRPL's 15 million tonne a year refinery under the fold would help bridge the shortfall.

Also, there can be synergies in as well as in optimising refinery set-up.

ONGC plans to maintain HPCL as an independent listed company under whom all its downstream units can be consolidated.

MRPL, in fact, originally was built by HPCL in joint venture with ONGC in 2003 acquired Birla Group stake and made it its subsidiary. HPCL continues to hold minority stake in MRPL.

While ONGC holds 71.63 per cent stake in MRPL, HPCL has 16.96 per cent.

After ONGC completed acquisition of the government's 51.11 per cent shares, HPCL has become its subsidiary.

HPCL has added 23.8 million tonne of annual oil refining capacity to ONGC's portfolio. This together with 15 million tonne will create India's second-biggest after (IOC).

Overall, it will become the third biggest refiner behind IOC and

MRPL will be the third refinery of HPCL, which already has units at and

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 09 2018. 18:50 IST
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