After being deferred twice , state-owned Oil and Natural Gas Corporation's (ONGC) Rs 11,500 crore public offer is now been scheduled to open on July 5.
The government plans to sell 5 per cent (427.77 million shares) through the follow-on public offer (FPO) that will open on July 5 and close on July 8, an official said in the national capital.
The share sale was originally planned to happen in 2010-11 but was deferred to April 5 as the company did not have adequate number of independent directors on its board to meet the market regulator Securities and Exchange Board of India's (Sebi) listing norm.
But the share sale was deferred again over appointment of independent directors on the company board.
"As per the scheduled drawn by the Department of Disinvestment in the Ministry of Finance, ONGC will file red herring prospectus (RHP) for the public offering around June 15," the official said. "Roadshows to promote the FPO would begin soon after."
ONGC does not meet Sebi's listing norm of having an equal number of functional and independent directors and the government had previously planned to withdraw both its nominee directors on the board to push the FPO through.
But the move would have led to ONGC losing its coveted Navaratna status, which gives the company board autonomy to approve an investment of any size on its projects and powers to invest up to Rs 1,000 crore in a joint venture company.
According to the norms, a Navaratna board can exercise its limitless powers only when it has government-nominated directors on board. Upon withdrawal of such directors, ONGC would have to seek nod of the Public Investment Board (PIB) for any spending of over Rs 100 crore, the official said.
"The consequences of withdrawing government directors were too grave and so it has been decided to make regular appointment of independent directors and till such time, the FPO was deferred," he said.
Former RBI Deputy Governor Usha Thorat and former Finance Secretary Arun Ramanathan and Deepak Nayyar, ex-vice chancellor of the Delhi University, are being appointed as independent or non-executive directors on the ONGC Board.
"The three names are with the Cabinet Committee on Appointments and their appointment is likely to happen this month," the official said.
ONGC has six functional directors, besides the chairman.
It also has two government-appointed nominee directors, taking the total strength of functional/promoter directors to nine.
Against this, it currently has five independent directors and needs four more to meet the Sebi's listing norm.
But since the company does not have a full-time chairman and director (human resources), appointment of three directors would help ONGC meet Sebi norm, the official said.