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ONGC's plan to merge MRPL with HPCL may have to wait till FY24
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SME Times News Bureau | 18 Jan, 2021
State-run oil and gas explorer ONGC's plan to complete the merger of its
refining subsidiary MRPL with recently acquired HPCL to align its
upstream and downstream operations into two verticals has got delayed.
The
process is now expected to be completed by FY24 as ONGC has decided to
consolidate its refining and petrochemicals business around MRPL first
before pushing for its merger.
Sources said that the process of
merging ONGC's two oil refining subsidiaries, Hindustan Petroleum Corp
Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), will
start only after the company completes merging ONGC Mangalore
Petrochemical Ltd (OMPL) with MRPL.
"The merger (HPCL and MRPL)
under conservative assumptions could happen by FY24-end as the MRPL-OMPL
merger has to happen first and that business should continue for five
years with FY19-end as the effective date of their merger at the least,"
company officials privy to the development said.
Under the
plan, MRPL may become a subsidiary of HPCL first. Under liberal
assumptions, the merger could start in 1-2 years as OMPL gets merged
with MRPL by then. OMPL has now become a 100 per cent subsidiary of
MRPL.
The board of MRPL on October 19 last year had approved the
acquisition of 49 per cent stake in OMPL from ONGC. This had paved the
way for merging OMPL with MRPL. Once this is done, the next stage of
merging MRPL with HPCL will begin.
OMPL, a subsidiary of MRPL,
is a joint venture between ONGC and MRPL, set up for value addition of
excess naphtha and aromatic streams available from the MRPL refinery.
The complex is the largest single stream unit in Asia, producing 914
KTPA Para-xylene and 283 KTPA Benzene.
MRPL is a subsidiary of
ONGC and schedule 'A' Miniratna, Central Public Sector Enterprise
(CPSE), under the Ministry of Petroleum & Natural Gas. As on
December 31, 2020, ONGC held 71.63 per cent and HPCL held 16.96 per cent
stake in MRPL.
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