The state-run explorer Oil and Natural Gas Corp said on Thursday its board approved a bonus share issue and a stock split, ahead of a planned share offering in March.
ONGC will also pay an interim special dividend of Rs 32 per share, while each equity share worth Rs 10 will be split into two.
The interim dividend and the associated taxes will reduce the company's cash reserves to about Rs 7,000 crore (USD 1.5 bn) from Rs 15,000 crore now, Chairman RS Sharma told reporters.
ONGC's board also on Thursday approved the issue of one bonus share for each held.
The government has approved a 5% stake sale in ONGC that is expected to raise more than USD 3 bn.
Sharma said the company expects to launch the follow-on public offer in the first week of March, while merchant bankers for the same could be finalised in January.
The share sale will be part of a government plan to sell stakes in about 60 state-run firms over the next few years, as India moves to cut a stubbornly high fiscal deficit and garner funds to spend on schemes for the poor.
Sharma reiterated that he expected the government to clarify subsidy mechanisms before the follow-on share sale.
ONGC gives discount on sale of crude oil to state refiners to partially compensate them for revenue losses on fuel sales.
ONGC shares, valued at about USD 63 bn, closed up 0.55% at 1329.Rs 10, in a Mumbai market that ended up about 1%.
Source: www.moneycontrol.com
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