Tuesday, September 27, 2022

HPCL acquires 17.28% stake in Petronet MHB

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New Delhi: Government-run HPCL (Hindustan Petroleum Corporation Ltd) has picked up 17.28 percent stake in Petronet MHB Ltd, a firm based in Mangalore that owns a petroleum product pipeline, for Rs 185.38 crore, the fuel retailer said in a filing to the stock exchanges on Thursday. HPCL and its parent company, ONGC (Oil & Natural Gas Corporation) currently hold 32.72 percent stake each in Petronet MHB Ltd.

HPCL says Petronet MHB acquisition will create synergy

“The acquisition will open up possible opportunities for synergy, better cost economics and revenue maximization,” HPCL said in the filing and added that no governmental or regulatory approvals are required for the acquisition. The acquisition is expected to be completed before the end of the current financial year (March 31).

It said that Petronet MHB Ltd had a net worth of Rs 796.30 crore as on March 31, 2019.

Post-deal, HPCL will own nearly 50% in the firm

“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 to 17.28 percent of the paid-up equity share capital at a price of Rs 19.55 per share,” HPCL said.

“Post-acquisition the shareholding of HPCL in Petronet MHB will be about 49.996 percent,” it added.

Petronet MHB

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 percent 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 to the stock exchange, Bank of Baroda said that it sold its 4.90 percent stake in Petronet MHB for Rs 52.56 crore.

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