Date:14/10/2004 URL: http://www.thehindubusinessline.com/2004/10/14/stories/2004101402410100.htm

Back Govt supports ONGC plan to buy back shares held by IOC

Our Bureau

New Delhi , Oct. 13

THE Government today supported Oil and Natural Gas Corporation's (ONGC) plans to buyback shares held by Indian Oil Corporation (IOC) in the company, with the Petroleum Minister, Mr Mani Shankar Aiyar, saying the buyout is not likely to impact ONGC's investment plans in its core business of oil and gas exploration and production.

ONGC had, late last month, secured an approval at its annual general meeting for amending the company's articles of association for buying back the 9.6 per cent stake held by IOC.

At Tuesday's closing price of Rs 791, ONGC would have to pay IOC around Rs 10,800 crore for buying back the 13.7 crore equity shares. IOC required the money for funding major investments it has lined up, including Rs 26,000 crore in Paradip refinery-cum-petrochemical complex. IOC holds 13.7 crore of the 142 crore shares issued by ONGC.

IOC and GAIL (India) have kicked off plans to sell their holdings in ONGC with the lock-in period for sale of shares coming to an end in September. GAIL (India) holds 4.8 per cent stake in ONGC.

Disagreeing with the suggestion that the buyback would dwindle ONGC's Rs 39,000 crore reserves, PTI reports quoted Mr Aiyar as saying, "The buyback will not in any way impact ONGC's investment in its core competence of oil and gas exploration. There will be no let up."