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The state-owned oil and gas company (ONGC) and its subsidiary Hindustan Petroleum Corporation (HPCL) have acquired a lender of Petronet Ltd, which owns the Mangalore oil product pipeline, for Rs 3.71 crore.

A consortium of eight public sector banks holds a 34.56% stake in Petronet Ltd, of which ONGC and HPCL each hold a 32.72% stake.

The two companies stated in separate but almost identical regulatory documents that ONGC and HPCL each purchased 17.28% of the shares from the lender.

The two companies each acquired a 17.28% stake in Petronet Ltd for Rs. 1,853 crore. These two companies each account for 49.99% of the companies transporting oil from the Mangalore refinery.

Mangalore Refinery and Petrochemical Co., Ltd. (MRPL) is also a subsidiary of ONGC. MRPL uses Petronet MHB's pipeline to deliver fuel.

ONGC and HPCL stated in regulatory documents that as of March 31, 2019, the net assets of Petronet Ltd were Rs 796.30 crore.

"The acquisition will open up possible opportunities for synergies, better cost economy and maximization of benefits," they said, adding that they do not require government or regulatory approval.

The acquisition is expected to be completed on March 31.

"The company has signed a share purchase agreement with February 27, 2020. A consortium of 8 state-owned banks (holding shares in Petronet Ltd) was acquired to acquire 94.8 million shares, accounting for 17.28% of the paid-up share capital. Share capital The price is Rs 19.55 per share, "HPCL said.

Shortly after HPCL's disclosure, ONGC also issued a similarly worded document.

HPCL added: "After the acquisition, HPCL's stake in Petronet will be approximately 49.996%." ONGC said that after the acquisition, it holds 49.996% of Petronet MHB.

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Petronet Ltd was established on July 31, 1998 on the principle of a common carrier to provide petroleum product transportation facilities from the Mangalore Refinery to the terminals of the oil sales company in Hassan and Devangoni (Bangalore).

ONGC owns 51.11% of HPCL.

Petronet MHB's operating income in the 2016-17 fiscal year was Rs. 128.33 crore, which increased to Rs. 130.89 crore in the fiscal year 2017-18, and Rs. 158.4844 crore in the second year.

Baroda Bank said in another document that it sold 4.90% of Petronet for Rs 52.56 crore.

SBI approved the full sale of 9.12% of Petronet Ltd (PMHBL) in October 2019.

SBI stated in another regulatory document: "The parties to the transaction have properly executed the stock purchase agreement on February 27, 2020, with a cash consideration of Rs 19.55 per share.

SBI holds 9.12% of PMHBL shares, which is equivalent to 5,00,62,640 shares.

Allahabad Bank said it had sold off 3.26% of its shares (1,78,87,247 shares) at a cash consideration of Rs 345.5 crore per share for Rs 19.55 per share.

And Canara Bank sold 3.25% of its shares (1,78,73,652 shares) at Rs 19.55 per share, equivalent to Rs 34.94 crore.

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Rebecca French writes books about Technology and smartwatches. Her books have received starred reviews in Technology Shout, Publishers Weekly, Library Journal, and Booklist. She is a New York Times and a USA Today Bestseller...