ONGC To Buy Oil Refiner HPCL: Cabinet Gives In-Principle Nod
New Delhi: The Union Cabinet on Wednesday gave its in-principle nod to sell government’s 51.11 per cent stake in Hindustan Petroleum Corporation Limited (HPCL), an oil refining and marketing company to upstream oil giant Oil and Natural Gas Corporation (ONGC).
Following Cabinet’s decision, the oil refiner HPCL would remain a subsidiary to ONGC with no change in its brand name after consolidation. The HPCL would remain as a separate entity since the deal does not envisage a merger. Finance Minister, Arun Jaitley in his budget speech had proposed integration of oil and gas sector.
Hindustan Petroleum has two oil refineries one in Visakhapatnam and one in Mumbai besides a big marketing network across the country.
Reports say that the deal would be exempted from the mandatory open offer. Sale of more than 26 per cent stake necessitates open offer in accordance with the takeover code. The deal will cost ONGC Rs.28 thousand crore.