State-owned explorer ONGC Ltd could borrow about Rs 25,000 crore to acquire downstream refiner HPCL, which will create the country’s first integrated oil and gas company.
The government had announced it would sell its 51.11 per cent stake in HPCL to ONGC, which will help it to achieve its disinvestment target for the current fiscal.
“The transaction also allows the government to monetise its HPCL ownership without losing ultimate control of the company,” Moody’s Investors Service said.
Based on HPCL’s average market capitalisation over the last three months, the government’s stake is worth about Rs 35,000 crore, which ONGC may fund by borrowing Rs 25,000 crore. It would also use own funds and sell its stakes in other companies.
ONGC officials said the PSU had plans to sell its stakes in Indian Oil Corporation (IOC) and GAIL (India). It has got approvals from shareholders to borrow up to Rs 25,000 crore from the market. Read More…