ONGC CLOSES IMPERIAL DEAL

Search News

ONGC Videsh (OVL), the overseas investment arm of India’s largest oil exploration company ONGC, has formally announced the acquisition of Imperial Energy after 96.82% shareholders of the UK-based company accepted its open offer. The value of the transaction is likely to be less than $2 billion, which includes about 6% convertible bonds. This is the first acquisition of a listed company abroad by any Indian public sector company.

“The company will make payments in two weeks and take over management control. The company will be de-listed from the London Stock Exchange as per the norms,” an ONGC official said. OVL will not have to pay $191 million immediately as about 6% of the convertible bondholders have the option to close the transaction by March 2009. They may also decide to hold the bonds, he added. OVL had made an open offer on December 9 at 1,250 pence per share.

“As at 1pm (London time) on December 30, 2008, Jarpeno (the subsidiary of OVL) had received valid acceptances from Imperial Energy shareholders in respect of 99,241,110 Imperial Energy shares, representing approximately 96.8% of Imperial Energy’s existing issued share capital,” said an OVL statement, made to the London Stock Exchange (LSE). OVL had the right to terminate the deal if it received less than 90% shares.

OVL managing director RS Butola said: “The deal was possible due to the support of the government.

The Cabinet met for a second time when crude oil plunged to review the rationale of the deal. But it finally decided in the favour of the long-term energy security of the country.” The plunge in crude prices from $147 per barrel in July, when OVL decided to acquire Imperial Energy, to the current $40 per barrel, had raised questions about the wisdom of going ahead with the deal at the price of 1,250 pence per share. The Cabinet, therefore, met again to endorse the deal in early December, arguing that securing oil and gas assets was important in the interest of the country’s long-term energy security, regardless of short-term fluctuations in oil prices.

”The Cabinet considered the pros and cons of the deal and then decided in its favour,” said a senior official in the oil m i n i s t r y, who requested anonymity. Experts involved in the deal told the government that the acquisition would be profitable due to future prospects of Imperial’s assets, which owns important oil and gas assets in Russia.

Find Lawyer / Law Firm

Decriminalization of Section 377: Reality or Facade?

The Supreme Court’s judgment to decriminalize Section 377 of Indian Penal Code (IPC) on 6th September 2019 was embarkation of a more egalitarian society. The verdict equipped members of LGBTQ commun More

Legal Consultation - Consult over phone, chat or send questions

Helplinelaw can set up your session with quality and experienced lawyers to discuss and resolve your legal matters. You can avail consultation in form of sending questions, phone call or webchat discussion  More