India plans to ask state-run Oil and Natural Gas Corporation (ONGC) to consider launching a rights issue to assist fund inexperienced initiatives at refining arm Hindustan Petroleum Corp, two sources stated, an train that might elevate about $1.9 billion.
The feedback come after India’s finance minister introduced a plan this 12 months to present fairness of ₹300 billion rupees ($3.6 billion) to assist the large state oil refiners transfer in direction of cleaner vitality.
The authorities is weighing choices for HPCL, together with immediately offering loans at preferential charges, stated the sources, who’ve direct information of the matter. They sought anonymity as they weren’t authorised to communicate with media.
The oil ministry is awaiting a response from the finance ministry on the plan for ONGC to launch a rights issue, one of many sources stated.
Based on rights points beforehand introduced by two different state refiners, an ONGC issue may quantity to about ₹155 billion ($1.86 billion), Reuters calculations present.
In 2018, New Delhi offered its total stake of 51.1% in HPCL to ONGC, making the agency a subsidiary of India’s prime vitality explorer. The authorities holds a stake of 58.93% in ONGC.
Initially, the federal government had deliberate to infuse funds into HPCL by allocation of preferential shares, however that risked pushing ONGC’s stake beneath 50% and ending the federal government’s oblique management of HPCL, one of many sources stated.
ONGC, HPCL and the oil and finance ministries didn’t instantly reply to requests for remark.
India’s different huge state refiners, Indian Oil Corp and Bharat Petroleum Corp have introduced plans to launch rights problems with ₹220 billion and ₹180 billion, respectively.
The authorities has a 51.5% stake in IOC and 52.98% share in BPCL.
However, an absence of readability from the federal government over how to infuse funds into HPCL has delayed the launch of rights points for IOC and BPCL, sources stated. Those points had earlier been deliberate by the top of October, sources have stated.
Combined, the three refiners purpose to make investments ₹3.5 trillion to ₹4 trillion to attain a purpose of net-zero emissions by 2040.
