HPCL acquisition: ONGC to hire independent consultant soon

Mumbai : State-run ONGC is planning of hiring an independent consultant to evaluate HPCL’s acquisition cost, revealed ONGC, chairman and managing director, Shashi Shanker. He added that the valuation will be out days’ after the consultant is hired.

Commenting about the HPCL acquisition, Shanker told, “Our timeline (for acquisition) is by this financial year end.” He reiterated it could be early as well.  He went on to add that the evaluation process is still on. Replying to a valuation question raised, Shanker said, “The ministry has appointed a consultant for valuation. We also like to get the valuation done independently. We are in the process of engaging a consultant.” Various ministries like finance; petroleum and natural gas and disinvestment will be involved in such evalution process.

 Just recently, the company received the documents from the government on this acquisition. “We are going through that and after that we will engage our consultant. After that the valuation should be completed in (few) days’ time,” he stated. Clearing the air about some rumours around this acquisition, he said, “There is an impression that this acquisition decision was thrust on us. That is not the case. After Finance Minister made an announcement in budget speech about integration, ONGC on our own evaluated different options. After that we zeroed on HPCL.”

The company has around 15 million tonnes refinery in Mangalore Refinery & Petrochemcials, but has no retail presence, while oil marketer HCPL has huge retail presence with over 14,400 outlets. So, it is a good fit, Shanker stated. Commenting about financing the acquistion, Shanker said that ONGC is a debt-free company and has good amount of assets. Financial part will not be an issue, he claimed.