Possible Merger With MRPL May Not Happen At Premium, HPCL Says
The anticipated merger between refiner and marketer Hindustan Petroleum Corporation Ltd. and Mangalore Refinery and Petrochemicals Ltd. will not happen at a premium in all likelihood.
“I don't think Oil and Natural Gas Corporation Ltd. will transfer its subsidiary, MRPL's stake to HPCL at a premium, if at all the deal were to happen,” MK Surana, chairman and managing director of HPCL, told BloombergQuint in an interview. He added that ONGC might gain on one side, but will incur losses on the other hand, as both HPCL and MRPL are its subsidiaries.
This comes after ONGC announced its plan to acquire the government's 51.1 percent stake in HPCL for Rs 36,915 crore on Saturday. The company added that it will buy HPCL shares at Rs 473.97 apiece, implying a premium of nearly 18 percent to HPCL's price at around 10 a.m.
Shashi Shanker, chairman, ONGC had not ruled out the chances of a possible merger between HPCL and MRPL later at a press conference, calling it a “logical” option. Resonating with his view, Surana said that while ONGC-HPCL merger did not make much sense, MRPL-HPCL deal would make better sense.
MRPL is a standalone refining company, and will add to HPCL's refining capacity which is lagging for now, said Surana. “From an overall efficiency point viewpoint, the deal is logical.”
The transaction between ONGC and HPCL can be optimised further, with the integration of MRPL with HPCL as far as the crude procurement, R&D effects, supply logistics are concerned.MK Surana, Chairman, HPCL
Watch the full conversation here:
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