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Oil and Natural Gas Corp (ONGC) has received government approval for selling its stake in IOC and GAIL, to fund HPCL acquisition worth Rs.36,915 crore.
Currently, ONGC has 13.77% holding in IOC, which at today’s trading price is worth Rs.26,200 crore and it holds 4.86% stake in GAIL which is worth approx Rs.3,847 crore.
As of now, ONGC is funding the HPCL acquisition from the approx Rs.12,000 crore cash it has and short term borrowing. Further, as per Shashi Shanker stated, “We will use our (Rs.12,000-13,000 crore) cash first and then the liquid assets and debt will be last. This order can change, because we won’t sell the liquid assets in distress. Also, we have offers for over Rs.50,000 crore debt at very competitive rates, both foreign currency and local.”
