• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Pratim Ranjan Bose

Kolkata , Aug. 31

OIL and Natural Gas Corporation's move to buy out Hindustan Petroleum Corporation Ltd's 16.95 per cent stake in Mangalore Refinery and Petrochemicals Ltd is facing an obstacle.

According to sources, HPCL has reportedly made a fresh presentation to the Union Ministry for Petroleum and Natural Gas opposing the move on the ground of losing "strategic business interest" over MRPL. HPCL markets a part of MRPL's products.

ONGC had recently expressed the hope for an early decision on the proposal.

"We are expecting it to be through," the ONGC Chairman and Managing Director, Mr Subir Raha, had recently told the media in Kolkata.

When contacted, the HPCL spokesperson told Business Line: "We only confirm that we have close to a 17 per cent stake in MRPL."

ONGC had formally approached the Ministry in September 2003 with a proposal to acquire HPCL's entire holding of 29.72 million shares in MRPL at a price of about Rs 37.75 per share.

Incidentally, the price offered was much higher than the Rs 2-per share offered by the A.V. Birla group while acquiring the controlling stake in MRPL.

HPCL originally held a 37.4 per cent stake in MRPL, which has come down to the current level during various debt restructuring exercises carried out by ONGC to bring down the debt-equity ratio from a staggering 15:1 to as low as 2:1 post-acquisition of the A.V. Birla group stake.

While the restructuring had increased ONGC shareholding in the company to more than 51 per cent, the company had also acquired the shareholding of banks and FIs in MRPL to finally take its stake to closer to 72 per cent before proposing the acquisition of HPCL's stake.

Though the proposal had received a favourable response from the both the Petroleum and Finance Ministries during the NDA regime, "the change of the Government at the Centre had delayed the issue," Mr Raha had told the media.

ONGC official sources said that HPCL did not enjoy any "first right" over MRPL's products. "ONGC has complete control over the company and now approaches all marketing companies for selling MRPL products."

Asked whether ONGC would find it difficult to get special resolutions because of the nature of its stake in MRPL, a senior official said that the company "does not foresee any such trouble."

More Stories on : Mergers & Acquisitions | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Lodha challenges appointment of executors

Copyright © 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line