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Company Update: ONGC

Company Update: ONGC
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First Published: Fri, Jan 02 2009. 09 16 AM IST
Updated: Fri, Jan 02 2009. 09 16 AM IST
ONGC has taken control of Imperial Energy Plc for £1.3 billion ($1.9 billion) after an overwhelming 96.8% of London-listed firm’s total shareholders accepted its takeover offer.
ONGC Videsh (OVL), the overseas arm of the state explorer ONGC, needed 90% shareholders to approve its deal, which will result in delisting of Imperial.
Imperial will be delisted from the LSE after it “squeezes out” the remaining un-tendered shares by posting them cheques of the offer amount and telling the shareholders that these un-tendered shares were no longer valid.
The deadline for the state-owned firm’s £12.50 per share offer has already closed. Imperial would be the biggest overseas ever acquisition by OVL. ONGC would lend close to $1 billion to fund the transaction at 5.96% interest rate.
The entire acquisition and subsequent delisting may take two to three weeks. ONGC Chairman, R.S.Sharma owed the acquisition to the Government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam.
We maintain BUY on the stock with a target price of Rs948.
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First Published: Fri, Jan 02 2009. 09 16 AM IST
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