(PTI)
Hindustan Petroleum Corp Ltd (HPCL) is likely to acquire Mangalore Refinery and Petrochemicals (MRPL) in a share-swap deal to become India’s second-largest oil refiner. The merger is likely to take place after ONGC, the country’s biggest oil and gas explorer, completes acquisition of HPCL in an all-cash deal by December or January, officials in know of the development said. MRPL is a subsidiary of Oil and Natural Gas Corp (ONGC). At present, ONGC owns 71.63% stake stake in MRPL while HPCL has 16.96%.
Once ONGC acquires 51.11% stake in HPCL, India’s third-largest refiner, for about Rs 35,000 crore, it will have two refinery subsidiaries — HPCL and MRPL. “It does not make economic sense to have two separate subsidiaries for the same business. And so the logical move would be to integrate MRPL with HPCL,” an official said. The government is selling its entire 51.11% holding in HPCL to ONGC for all-cash. HPCL will become a subsidiary of ONGC after the deal and retain independent board.
