Shares of ONGC were currently down 3.70% at Rs 89.85. The stock traded in the range of Rs 89.55 and Rs 91.75 so far during the day.
Shares of HPCL were currently down 3.42% at Rs 197.60. The scrip traded in the range of Rs 194.60 and Rs 202.75 so far during the day.
ONGC and HPCL have entered into a share purchase agreement dated 27 February 2020 with consortium of eight nationalized banks, which hold stake in Petronet MHB, for acquisition of 9,48,22,632 equity shares, corresponding to 17.28% stake, of Petronet MHB for Rs 185.38 crore.
Petronet MHB provides petroleum product transportation facility from Mangalore Refinery at Mangalore to the Oil Marketing Company Terminals at Hassan and Devangonthi (Bangalore).
Prior to acquisition, ONGC and HPCL held 32.72% each in the company. The proposed transaction will consolidate holdings of promoters, besides opening up possible opportunities for synergy, better cost economics and revenue maximization.
Post acquisition, ONGC and HPCL will hold 49.99% stake each in the company. The acquisition is expected to be completed during the quarter ending 31 March 2020. The consideration for the transaction will be paid in cash.
Petronet MHS has a networth of Rs 796.30 crore as of 31 March 2019 and revenue from operations of Rs 158.44 crore for the year ended 31 March 2019. The company is an unlisted associate company of HPCL.
