(ET)
The government is planning a share buyback by Oil and Natural Gas Corp (ONGC) to help meet the challenging divestment target for the year, according to people familiar with the matter. The buyback, if approved by the board of ONGC, is likely to be close to a billion dollars in size, they said.
The government has begun discussing the option of buyback with ONGC, and plans to offer part of its shareholding back to the company, people said. ONGC, which currently has no cash reserve and a net debt of about Rs 14,000 crore, may primarily use its internal cashflow and some bit of debt to fund the buyback, people cited above said. The government had initially toyed with the idea of selling about 5% stake in ONGC, and mooted listing the company overseas to raise funds but is now coming around to the view that a buyback can fetch more with less effort.
