State-owned Oil and Natural Gas Corp (ONGC) on 20th January (Saturday) announced the acquisition of government’s entire 51.11 percent cent stake in oil refiner HPCL for Rs 36,915 crore by paying a premium of over 10 percent.
As per sources ONGC will pay Rs 473.97 per share for 77.8 crore shares of the government in Hindustan Petroleum Corp Ltd (HPCL), the company said in a stock exchange filing.
The price it is paying is 14 percent higher than Friday’s closing price of HPCL and over 10 percent of the 60-day weighted average of the scrip.
Sources said ONGC has already taken board approval for raising borrowing limit to Rs 35,000 crore from the previous approval of Rs 25,000 crore. Also, it has loan commitments from domestic and foreign lenders totaling roughly double the acquisition prices and the company would draw from them to make the payments in next one week, they said.
Government of India has entered into an agreement with ONGC today for strategic sale of its 51.11% equity share-holding in HPCL at a consideration of Rs. 36,915 crores.
ONGC is the largest producer of crude oil and natural gas in India, contributing around 70 percent of domestic production.