Date:23/07/2005 URL: http://www.thehindubusinessline.com/2005/07/23/stories/2005072302480300.htm

Back IOC awaits Govt nod to offload stake in ONGC

Our Bureau

New Delhi , July 22

INDIAN Oil Corporation (IOC) is still awaiting the Government's approval to offload the company's stake in Oil and Natural Gas Corporation (ONGC).

According to IOC sources, the company has been making a request to the nodal Ministry, which is yet to revert.

IOC expects the Ministry to take a decision soon specially as the report on `Synergy in Energy', which was to examine issue of PSU board restructuring, is already with the Government.

The earlier request made by the company was put on hold, as the Ministry was weighing the option of making structural changes in the public sector oil firms.

Meanwhile, ONGC has been very clear in its stance that it was not in favour of IOC offloading the stake in the market and that it would prefer buying back.

The Petroleum Minister, Mr Mani Shankar Aiyar, is understood to have endorsed the proposal of selling the equity back to ONGC.

ONGC sources told Business Line that the company has been opposing the proposal of selling the shares in the market, as they are high value stock. The company would like to buyback its stake as per the Securities and Exchange Board of India guidelines.

IOC sources said the company is yet to decide on how to offload the stake. The decision would depend on IOCs cash flow requirement, sources added.

IOC holds 9.61 per cent in ONGC, and going by the market value, it would fetch more than Rs 12,000 crore. IOC bought these shares from the Government in 1998. ONGC has a 9.11 per cent stake in IOC.