MRPL-HPCL Merger
The oil ministry is considering a merger between Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL), both subsidiaries of Oil and Natural Gas Corp (ONGC). This proposal, which had been suggested shortly after ONGC acquired HPCL five years ago, is now gaining traction. The merger is expected to be structured as a share-swap deal, benefiting MRPL shareholders with fresh shares from HPCL.
Current Shareholding and Approval Process
Presently, ONGC holds 71.63% of MRPL, while HPCL holds 16.96%, and the public holds 11.42%. To proceed with the merger, the oil ministry is anticipated to seek approval from the cabinet. However, regulatory requirements may cause a delay, pushing the merger into the next year.
Benefits and Tax Gains
The proposed merger aims to consolidate most of the downstream assets of the ONGC group under HPCL. It is expected to provide tax benefits by reducing the central sales tax (CST) outgo for MRPL. HPCL, with its vast retail network, will have in-house access to MRPL’s products, contributing to increased efficiency in the fuel industry.
Related Posts
Month: Current Affairs - May, 2023
Category: India Nation & States Current Affairs