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ONGC not against privatisation: Raha
Monday, 01 December 2003, 20:30 IST
BANGALORE: India's exploration major Oil and Natural Gas Corporation (ONGC) has no objection to the government offloading five percent of its stake if that will help meet the disinvestment target for fiscal 2003-04.
"As ONGC's rightful owner, it is up to the government to decide whether to dilute its stake or allow the other two stakeholders - IOC and GAIL - to sell off their cross-holdings in the company," ONGC chairman and managing director Subir Raha told IANS.
Noting there was a possibility of the government divesting its stake either through an initial public offering (IPO) or strategic sale, Raha said the exercise would have to be carried out keeping in view the interests of ONGC in terms of valuation and market response.
"The government will have to evaluate which the best option is: whether to allow IOC and GAIL to off-load their combined 12 percent cross-holding in ONGC or dilute its stake through an IPO.
"As far as ONGC is concerned, we don't need to do an IPO now as our cash flows are healthy to sustain and we have a choice to raise funds through debt in future.
"The government objective should be to realize the maximum price. Its approach has to be calibrated, as diluting even one percent of the stake in the market would mean realizing over 
10 billion on account of our scrip's current market capitalisation," Raha stated.
Asked whether ONGC would be paying an interim dividend to the government to help it bridge the budgetary deficit, Raha said the company was yet to receive any such advice.
"We have no reservations in declaring interim dividend to pay up the government. If we get the advice, we will certainly consider it, as we did it in the last fiscal (2002-03) when 24 billion was paid to the government as interim dividend," Raha said.
Admitting that the company had sought to increase the financial powers of its overseas investing arm ONGC Videsh Ltd (OVL), Raha said the government was considering the proposal and a decision to increase the corpus to $100 million from $44 million is expected soon.
"The government needs to reconsider the limit as it was fixed six to seven years ago when the dollar was ruling at 32-34 against 45-46 now.
"In the face of competition from Chinese and Malaysian firms with deep pockets in acquiring oil assets abroad, we need to counter them with strong financial base," Rao maintained.
On the Saudi Arabian invitation to either invest in explorations in the kingdom or enter the market as an operator, Raha said ONGC was considering both options.
"It is an honour for us to be recognized as a global operator by the Saudi government. With presence in eight countries outside India, ONGC will explore both the offers as Saudi Arabia has the world's largest oil reserves and it is a great opportunity to leverage our expertise and execute projects on turn-key basis," Raha said.
The ONGC chairman also disclosed that OVL was exploring investing opportunities in a few countries for acquiring strategic oil assets. He did not disclose the geographic regions under the scanner.
Source: IANS
10 billion on account of our scrip's current market capitalisation," Raha stated.
Asked whether ONGC would be paying an interim dividend to the government to help it bridge the budgetary deficit, Raha said the company was yet to receive any such advice.
"We have no reservations in declaring interim dividend to pay up the government. If we get the advice, we will certainly consider it, as we did it in the last fiscal (2002-03) when 24 billion was paid to the government as interim dividend," Raha said.
Admitting that the company had sought to increase the financial powers of its overseas investing arm ONGC Videsh Ltd (OVL), Raha said the government was considering the proposal and a decision to increase the corpus to $100 million from $44 million is expected soon.
"The government needs to reconsider the limit as it was fixed six to seven years ago when the dollar was ruling at 32-34 against 45-46 now.
"In the face of competition from Chinese and Malaysian firms with deep pockets in acquiring oil assets abroad, we need to counter them with strong financial base," Rao maintained.
On the Saudi Arabian invitation to either invest in explorations in the kingdom or enter the market as an operator, Raha said ONGC was considering both options.
"It is an honour for us to be recognized as a global operator by the Saudi government. With presence in eight countries outside India, ONGC will explore both the offers as Saudi Arabia has the world's largest oil reserves and it is a great opportunity to leverage our expertise and execute projects on turn-key basis," Raha said.
The ONGC chairman also disclosed that OVL was exploring investing opportunities in a few countries for acquiring strategic oil assets. He did not disclose the geographic regions under the scanner.
Source: IANS