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Hive Off Oil and Natural Gas Corporation Ltd's ONGC Videsh Ltd's Says Plan Panel-The Economic Times

Tuesday, 19 Mar 2013 01:05am EDT 

The Economic Times reported that the Planning Commission has revived a proposal to hive off ONGC Videsh Ltd, India's flagship for acquiring oil assets abroad, from parent Oil and Natural Gas Corporation Ltd (ONGC) and listing it on domestic and overseas bourses. It is about time that OVL was hived off as an independent entity which could list on the stock exchanges in India and abroad and raise money internally, the Plan panel has said in response to a proposal to seek Cabinet's nod for ONGC Videsh's proposed acquisition of ConocoPhillips' 8.4% stake in the Kazakhstan's Kashagan oilfields. The Plan panel has argued that ONGC Videsh would eventually become a global company. Therefore, the Company's fiduciary relationship with parent should be re-examined in view of the huge cash investment that ONGC is required to make for the Kashagan deal. ONGC plans to fund the acquisition through bond issue, which, the Plan panel has said, would strain resources for domestic operations. Besides, the Commission has said, there would be considerable gap between the time the investment is made and production would begin. That is why, the panel has said, ONGC Videsh should be listed on domestic and overseas bourses as a separate company for raising funds internally so that ONGC is not financially stretched for a considerable period of time.