ONGC, HPCL buy out bankers in Petronet MHB for `371 crore

NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) and its subsidiary Hindustan Petroleum Corp Ltd (HPCL) have bought out lenders in Petronet MHB Ltd, the firm that owns a petroleum product pipeline in Mangalore, for about Rs 371 crore.

A consortium of eight public sector banks held 34.56 per cent stake in Petronet MHB Ltd, where ONGC and HPCL held 32.72 per cent apiece.

ONGC and HPCL bought 17.28 per cent stake each from lenders, the firms said in separate but almost identical regulatory filings.

The two firms paid Rs 185.38 crore each for acquiring 17.28 per cent more share in Petronet

MHB Ltd. The now hold 49.996 per cent each in the company that transports petroleum products from Mangalore Refinery.

Mangalore Refinery and Petrochemicals Ltd (MRPL) is also a subsidary of ONGC. MRPL uses the pipeline of Petronet MHB for moving fuel.

In a regulatory filings, ONGC and HPCL said Petronet MHB Ltd had a networth of Rs 796.30 crore as of March 31, 2019.

"The acquisition will open up possible opportunities for synergy, better cost economics and revenue maximisation," they said, adding that no governmental or regulatory approvals are required for the acquisition.

The acquisition is expected to be completed by March 31.

"The company has entered into a share purchase agreement dated February 27, 2020, with consortium of 8 nationalised banks, who hold equity shares in Petronet MHB Ltd, for acquisition of 9.48 crore equity shares aggregating ot 17.28 per cent of the paid-up equity share capital at a price of Rs 19.55 per share," HPCL said.

ONGC also posted a similarly worded filing shortly after HPCL disclosure.

"Post-acquisition the shareholding of HPCL in Petronet MHB will be about 49.996 per cent," HPCL added. ONGC said it hold 49.996 per cent stake in Petronet MHB after the acquisition.

Petronet MHB Ltd was incorporated on July 31, 1998 on a common carrier principle to provide petroleum product transportation facility from Mangalore refinery to the oil marketing company terminals at Hassan and Devangonthi (Bangalore).

ONGC owns 51.11 per cent stake in HPCL.

Petronet MHB had revenue from operation of Rs 128.33 crore in 2016-17, which rose to Rs 130.89 crore in 2017-18 and Rs 158.44 crore in the following year.

In a separate filing, Bank of Baroda said it sold its 4.90 per cent stake in Petronet MHB for Rs 52.56 crore.