New Delhi: The long-drawn slugfest between ONGC and HPCL over latter’s repeated failure to recognise the state-run explorer as its parent may upset gains from such a consolidation exercise aimed at creating an entity with a significant presence in entire oil chain.
Sources said one of the first victims of the slugfest would be Oil and Natural Gas Corporation’s (ONGC) plan to derive synergy from the Hindustan Petroleum Corporation (HPCL) purchase by merging the two refining subsidiaries of the upstream major.
ONGC had planned the merger of Mangalore Refineries and Petrochemicals Ltd (MRPL) with HPCL long before it bought the government’s entire 51.11 per cent stake in HPCL for Rs 36,915 crore last year.
With HPCL, however, continuing to play hard ball over the promoter issue and listing ONGC as a public shareholder for the fifth consecutive quarter in its latest regulatory filing on April 18, sources said the MRPL-HPCL merger has got further delayed and is unlikely to be completed even in the current fiscal.
“The ONGC-HPCL slugfest has ensured that neither the MRPL board has taken up the issue of merger, nor any consultant appointed to oversee and conclude the process,” a source familiar with the developments said.
“Even if government’s intervention resolves the issue between the two PSUs in the next couple of months, the merger could take a further year to conclude. So, the acquirer has to suffer more.”
The government holds 88.58 per cent stake in MRPL. Of this, ONGC holds 71.63 per cent while HPCL has 16.93 per cent. (IANS)
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