ONGC to buy out HPCL

Tribune News Service

New Delhi, July 19

The government today gave in-principle approval for state-owned upstream giant ONGC to buy the government’s 51% stake in Hindustan Petroleum Corporation Ltd (HPCL).

The takeover would make HPCL a subsidiary of ONGC but it will indirectly remain a public-sector undertaking through the Centre’s stake in ONGC.

The decision was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by PM Narendra Modi.

An official statement said the CCEA had authorised the Alternative Mechanism to take decision for divestment through Exchange Traded Fund (ETF) out of all listed CPSEs, including the CPSEs listed subsequently subject to the government retaining 51% in these CPSEs.

The authorisation was also given to take decision on the divestment in respect of public sector banks, other listed public sector financial institutions and public sector insurance companies (when listed) through ETF or other methods subject to government retaining 52%.

The statement said clearance was given to take decision on matters related to divestment through ETF like constitution of ETF portfolio; the price/net asset value at which share of listed companies forming the ETF basket will be placed by the government for divestment at the disposal of the ETF provider (AMC); the incentive structure for investors, loyalty bonus etc.; and any other aspect of pricing and the mode of disinvestment as required to be taken by the Government.