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ONGC to file draft papers for FPO next week

ONGC to file draft papers for FPO next week

The Government is selling its 5 per cent stake in the follow-on public offer (FPO) that will open on March 15.

State-owned Oil and Natural Gas Corp (ONGC) will file red herring prospectus (RHP) for its Rs 11,700 crore share sale on Monday next, a senior company official said on Wednesday.

"Our board will meet on February 25 to approve the RHP. It is most likely to be filed with SEBI and Registrar of Companies on February 28 or latest by March 1," he said..

The Government is selling its 5 per cent stake in the follow-on public offer (FPO) that will open on March 15.

The sale of 427.77 million equity shares at current price of Rs 271.85 on the Bombay Stock Exchange (BSE) will fetch the government a little less than Rs 11,700 crore.

Post offer, the government stake in ONGC would come down to 69.14 per cent from the current 74.14 per cent.

"As of now, the public offer is scheduled to open on March 15 and will close on March 18," he said adding roadshows to promote the share offering in the nation's biggest explorer and highest profit earning company will be held in India and aboard from March 2 to 9.

ONGC last week received the report of independent auditors who certified the company's oil and gas reserves, a mandatory requirement for explorers making public offers.

A group of ministers headed by Finance Minister Pranab Mukhejree is likely to decide on a price band for the FPO on March 11.

The official said ONGC was ready with its RHP but is awaiting appointment of two independent directors on its board to meet market regulator SEBI's listing requirement.

"We expect the government to clear appointment of the two independent directors by this week end and certainly by Monday (next)," he said.

Oil Minister S Jaipal Reddy had last week stated that he has cleared appointment of two independent directors for board of ONGC. Their names have gone to the Appointments Committee of the Cabinet (ACC).

ONGC has six functional directors, besides the CMD. It also has two government-appointed nominee directors taking the total strength of functional/ promoter directors to nine.

Against this, the company, at present, has four independent directors and needed five more to meet market regulator Sebi's listing norm of having equal number of executive and non-executive directors.

However, since ONGC is without a permanent Chairman and vacancies of Directors for Human Resources and Exploration are not been filled, the effective strength of full-time functional directors together with government-nominee directors was down to six.

Bank of America Corp, Nomura Holdings, HSBC Holdings Plc, JM Financial Services, Citigroup Inc and Morgan Stanley are managing the FPO.