ONGC gets nod to explore rejig options

ONGC gets nod to explore rejig options

FPJ BureauUpdated: Wednesday, May 29, 2019, 08:06 AM IST
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 New Delhi : The board of state-owned Oil and Natural Gas Corp (ONGC) has given in-principle approval for exploring options for a restructuring of the group firms including the merger of subsidiaries MRPL and HPCL.

ONGC has several subsidiaries and joint ventures including two in refining sector – Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals; and two petrochemical units – ONGC Petro additions (OPaL) and ONGC Mangalore Petrochemicals. It also has an overseas investment arm in ONGC Videsh.

While ONGC did not provide details of the proposed restructuring, sources in the company said an advisor would be appointed to suggest possible options.

The board of the company will take a call on the options suggested by the advisor.

ONGC is looking at trimming down the structure by merging some of the subsidiaries.

While MRPL operates a 15 million tonnes a year refinery at Mangalore in Karnataka, HPCL has two refineries at Mumbai and Vizag. OPaL has built at Rs 32,000 crore petrochemical complex at Dahej in Gujarat, while ONGC Tripura Power Co Ltd (OTPC) operates a 726 MW power plant at Palatana in Tripura.

It also has two SEZ companies – Dahej SEZ and Mangalore SEZ. Also, it has a pipeline company in Petronet MHB and a stake in helicopter service operator, Pawan Hans as well as Petronet LNG.

Sources said while there is certainly a case for merger of MRPL with HPCL for not just business synergies but also help avoid penalties from market regulator Sebi for not meeting public float requirement in case of the former. Also, some other units too can be combined. MRPL in a separate regulatory filing said it will seek more time from Sebi to comply with the listing requirement.

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