India said to tweak HPCL share sale terms to skip open offer

NEW DELHI • India has tweaked the terms for sale of its shares in Hindustan Petroleum Corp Ltd (HPCL) to the country’s biggest explorer to avoid a mandatory open offer to minority shareholders, according to people with knowledge of the plan.

HPCL “will continue to be controlled by the government” through Oil and Natural Gas Corp Ltd (ONGC), the Department of Investment and Public Asset Management said in a clarification on its website.

The amendment to the terms will avoid triggering an open offer, which would have dragged the completion of the transaction and increased ONGC’s payout, said the people, who asked not to be identified citing rules.

The government is aiming to complete the transaction this financial year as part of its plan to achieve the target of over US$11 billion (RM47.19 billion) from asset sales in the year ending March.

The sale of its 51.11% holding in HPCL can fetch Prime Minister Narendra Modi’s administration about 330 billion rupees (RM23.1 billion) at yesterday’s price, about half of its annual share sale aim.

ONGC is expected to get the final approval from its board within three months, according to the people. — Bloomberg