<http://business.rediff.com/report/2010/aug/06/divest-rs-21000-crore-govt-eyes-bonanza-from-ongc-ioc-selloff.htm#write>
[image: Money]The government plans to sell 5 per cent of its stake in Oil and Natural Gas Corporation and 10 per cent in Indian Oil Corporation [ Get Quote <http://portfolio.rediff.com/quotes/indian+oil+corporation+ltd> ] to raise about Rs 21,000 crore (Rs 210 billion) this fiscal, Oil Secretary S Sundareshan said on Friday. "We have received a note from department of disinvestment that says they have approval of the Finance Ministry for divestment of government stake in ONGC [ Get Quote<http://portfolio.rediff.com/quotes/oil+%26+natural+gas+corporation+ltd>] and IOC," he told PTI in New Delhi [ Images <http://search.rediff.com/imgsrch/default.php?MT=delhi> ]. The proposal, he said, is for sale of 5 per cent or 10.6 crore (106 million) equity shares in ONGC through a follow-on public offer which at Friday's trading price of Rs 1,233.25 would fetch the government Rs 13,189 crore (Rs 131.89 billion). In IOC, DoD has proposed to sell 5 per cent of government equity through a FPO. "Simultaneously, IOC also proposes to sell 10 per cent of the expanded equity capital (through an FPO) to raise funds for its expansion plans," he said. Post stake sale, the government's shareholding in ONGC will come down to 69.14 per cent from 74.14 per cent currently. In IOC, the twin divestment and stake sale would reduce the government holding from 78.92 per cent to 64.57 per cent. "We are not preparing any Cabinet note. It is the department of disinvestment which will do that. We only have to seek approval (for the stake sale) from the (oil) minister (Murli Deora)," Sundareshan said. According to the road map being prepared, IOC would be the first to be disinvested. It will first sell 10 per cent or 24.27 crore (Rs 242.7 million) equity shares that at today's stock price of Rs 363.90 would fetch the company Rs 8,835 crore (Rs 88.35 billion) to help it part-finance its capital expenditure programme of Rs 75,000 crore (Rs 750 billion). This would be followed sale of 10 per cent government holding amounting to 19 crore (190 million) shares to raise Rs 7,000 crore (Rs 70 billion). ONGC divestment will follow this. IOC has written to the oil ministry expressing its interest in raising money from the market for its capital investment requirement. The nation's largest oil firm wants to take advantage of the recent government decision to free fuel prices by tapping the capital markets. The government had in June decontrolled petrol price that resulted in a Rs 3.50 per litre hike in rates in Delhi. Also, diesel prices were hiked by Rs 2 per litre, domestic LPG by Rs 35 per cylinder and Rs 3 a litre on kerosene. Despite the June move, IOC currently loses Rs 2.76 a litre on diesel, Rs 170.57 per litre on LPG and Rs 15.41 a litre on kerosene and is estimated to lose Rs 31,770 crore (Rs 317.7 billion) in revenues this fiscal. http://business.rediff.com/report/2010/aug/06/divest-rs-21000-crore-govt-eyes-bonanza-from-ongc-ioc-selloff.htm -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
