ONGC buys government’s 51.11 per cent stake in HPCL

The Oil and Natural Gas Corporation (ONGC) on January 31, 2018, bought the government’s entire 51.11 per cent stake in oil refiner Hindustan Petroleum Corporation Limited (HPCL) for Rs 369.15 billion. ONGC bought 778.8 million shares in HPCL at Rs 473.97 per share which was higher than the Rs 396.50 closing price of HPCL on the Bombay Stock Exchange on that day. The acquisition was done in an off-market deal. ONGC has entered into loan agreements with Punjab National Bank (PNB), Bank of India and Axis Bank for a borrowing of Rs 180.6 billion to part finance HPCL’s acquisition. The loans are of one-year duration. The pact with PNB is for a loan of up to Rs 106 billion, with Bank of India for another Rs 44.6 billion, and from Axis Bank it has secured Rs 30 billion credit. The company is likely to sign more loan agreements to pay for the acquisition.