ONGC seems to be pushing its own case so that it doesn’t have to pay an extensive premium to take over HPCL, with a company executive reportedly saying that the latter is already fairly valued. This comes after last week’s news reports that the government may ask ONGC to pay 40%-50% premium to buy stake in HPCL.
However, with the latest news report, it seems that ONGC might not be game to the idea of shelling out so much money so easily. Further, the ONGC executive also told the newspaper that the question of paying a control premium does not arise, since the change in ownership of HPCL from the government to ONGC will not change its nature, as control for both the companies rests with the government.
Further, the government is also reportedly considering forming a Group of Ministers (GoM) to frame guidelines, price and timeframe for the share sale.
The Department of Disinvestment is learned to have already issued a Cabinet note on the proposed amalgamation of the state-run refiner Hindustan Petroleum Corp Ltd with the giant oil explorer Oil and Natural Gas Corp, in the government’s quest to create a huge energy PSU of the global scale.