(TOI)
The Cabinet is likely to take up flagship explorer ONGC’s proposal to acquire the government’s entire 51.1% stake in the country’s third largest refiner-retailer Hindustan Petroleum (HPCL) on Wednesday in a deal size estimated at over Rs 28,000 crore. The deal size could rise by another Rs 14,600 crore or so if the government does not waive the need for making an open offer to acquire an additional 26% from the market as required under norms.
The move is in line with the government’s intention to create integrated Indian oil companies of global size and heft through mergers and acquisitions among existing state-run players. The stake sale in HPCL will also help the government meet some 38% of its disinvestment target of Rs 72,500 crore for this fiscal. “We see opportunities to strengthen our CPSEs (central public sector enterprises) through consolidation, mergers and acquisitions. By these methods, the CPSEs can be integrated across the value chain of an industry. It will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for stakeholders. Possibilities of such restructuring are visible in the oil and gas sector. We propose to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies,” finance minister Arun Jaitley had said in his budget speech.
