ONGC-HPCL deal to happen by Dec

ONGC-HPCL deal to happen by Dec

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State-owned Oil and Natural Gas Corp may sell some of its stake in Indian Oil Corp and gas utility GAIL India to part fund its Rs 32,000 crore acquisition of refiner HPCL, Chairman DK Sarraf said.ONGC holds 13.77 percent stake in Indias biggest refiner IOC, which at todays market price is worth about Rs 26,600 crore. It has another 4.87 percent stake in GAIL India Ltd, worth Rs 1,637 crore."We have several options to fund the acquisition of governments 51.11 percent stake in HPCL.

On a standalone basis we are debt free and so we can borrow from the market. Also, we have certain investments (in other oil companies) which can be sold," he told reporters last night.The companys shareholders yesterday allowed it to raise up to Rs 25,000 crore debt, he said, adding that the company had about Rs 10,000 crore of cash in hand."We havent decided what will be the source of fund (for the acquisition).

It can be one of the options or a combination of them. Funding is certainly no difficulty," he said.The governments transaction advisor JM Financial and legal consultant Cyril Amarchand Mangaldas are preparing Information Memorandum (IM) on Hindustan Petroleum Corporation Ltd (HPCL).ONGC has appointed SBI Caps and the Citi Group as its merchant bankers for the deal and Shardul Amarchand Mangaldas as legal advisor, who would study the IM to arrive at a valuation for the takeover of the cou...

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