ONGC to invest Rs 15,000 crore in ONGC Petro-additions; stock rises
ONGC share price BSE: Shares of Oil and Natural Gas Corporation (ONGC) over 1 per cent on the BSE in Friday's session after the state-owned oil exploration company said it will infuse about Rs 15,000 crore in ONGC Petro-additions (OPaL) as part of a financial restructuring exercise that will see gas utility GAIL being edged out of the petrochemical firm.
ONGC share price BSE, ONGC OPaL news: Shares of Oil and Natural Gas Corporation (ONGC) gained nearly 2 per cent on the BSE in Friday's session after the state-owned oil exploration company said it will infuse about Rs 15,000 crore in ONGC Petro-additions (OPaL) as part of a financial restructuring exercise that will see gas utility GAIL being edged out of the petrochemical firm. ONGC currently holds a 49.36 per cent stake in ONGC Petro-additions Ltd (OPaL), which operates a mega petrochemical plant at Dahej in Gujarat. GAIL (India) Ltd has 49.21 per cent interest, and Gujarat State Petrochemical Corp (GSPC) has the remaining 1.43 per cent.
In Friday's trade, Gail shares ended at Rs 128.05, up 1.59 per cent while ONGC shares finished 1.57 per cent higher at Rs 184.4 on the BSE.
ONGC's board approved a financial restructuring of the petrochemical firm, which had been making losses due to its high debt. After this restructuring, ONGC's shareholding in OPaL will increase from 49.36 per cent to approximately 95 per cent, subject to valuation and mode of investment.
Animal vs Sam Bahadur Box Office Collection: Animal enters Rs 500 crore club, beats Sam Baadur on Day 6 | Check day-wise collection, OTT release date and more
DOMS IPO to open for subscription soon: Check out price band, lot size, allotment date, other details
Data security is paramount to us; we invest in cutting-edge tech to keep customer data safe, says Kavitha Subramanian, Co-Founder, Upstox
ONGC will convert share warrants into equity, buy back compulsory convertible debts (CCDs) of Rs 7,778 crore by ONGC, and invest Rs 7,000 crore more equity, according to a regulatory filing by the refiner with the stock exchanges. ONGC Petro Additions Limited (OPaL) was incorporated on November 15, 2006, as a petrochemical complex consisting of a global-scale dual feed cracker with downstream polymer units as an integration-cum-value addition project utilising ONGC’s Naphtha stream from Hazira and Uran plants and C2+ streams from Dahej Extraction Plant.
In 2008, GAIL picked up a stake in OPaL, which was then building the mega-petrochemical complex at Dahej. However, the project faced major cost and time overruns, and GAIL decided to restrict its equity contribution to the original Rs 996.28 crore. The plant, which at the time of conception was projected to cost Rs 12,440 crore, was completed only in 2017 at a cost of about Rs 30,000 crore. GAIL and GSPC will now together hold close to 5 per cent of OPaL post-financial restructuring.