(BS)
Oil and Natural Gas Corporation (ONGC) is likely to take a short-term bridge loan for about one year to fund the acquisition of the government’s stake in Hindustan Petroleum Corporation (HPCL).
ONGC has already lined up plans to sell its stake in Indian Oil Corporation (IOC) and GAIL (India) and has also got approvals from shareholders to borrow up to Rs 25,000 crore from the market. “We are looking into all options. As we have to look at favourable market conditions for selling stake in the two companies, we are looking into the option of a bridge loan or any short-term loan for at least a year,” an ONGC official said.
The Union Cabinet had given its clearance to sell 51.11 per cent government holding in HPCL to India’s largest explorer ONGC on July 19 to create a global energy giant. Based on the current market capitalisation of HPCL, the acquisition is likely to cost about Rs 33,000 crore.
The department of investment and public asset management (Dipam) is likely to finalise the timing of the deal soon. However, in his last press conference as Chairman and Managing Director of ONGC, D K Sarraf had said the deal was likely to happen by December. ONGC has already appointed Citi Bank and SBI Caps as consultants for the deal.
