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BuSINESS NEWS



          Govt tweaks HPCL's terms of                            Petronas scouts for LNG

          sale to ONGC to avoid 'open                            opportunities in India

          offer'                                                     alaysia's national oil company Petronas plans to
                                                                 Mlook for equity partnerships in the liquified natural
             he government has tweaked the terms of sale of its   gas(LNG) infrastructure segment in India. To expand its
          T51.11 per cent stake in Hindustan PetroleumCorporation   presence in the country, the company is also looking to
          (HPCL) to oil and the Natural GasCorporation (oNGC) by   secure long term LNG supply contracts. "We are looking
          including phrases that will help avoid triggering an open   at options in the LNG infrastructure space like gas
          offer according to reports in EconomicTimes . The Cabinet   terminals and pipeline through equity partnerships in
                                              Committee on       India," said Datuk Wan Zulkiflee Wan Ariffin, President
                                              Economic Affairs   & Group CEO for Petronas. With over 30 million tonnes
                                              (CCEA) had on      per annum supply capacity, Petronas is currently the
                                              July 19 granted    third largest LNGplayer globally. However with around
                                              “in-principle”     15 LNG cargoes delivered to India, its exposure to
                                              approval for       India's LNG business so far is insignificant. At present,
                                              strategicsale      the company's LNGexposure to India is through the spot
                                              of       t he      market. However, the company will focus on procuring
                                              government’s       long term LNG contracts in India. India overall
                                              stake in HPCL      contributes close to $1.5 billion to the company's total
                                              to     o NGC       turnover  of  $50  billion.  Petronas'  largest  exposure
                                              “along with the    to India is through crude supply, with India being its
          transfer of management control, which will result in   largest crude supply market internationally. It now
          HPCL becoming a subsidiary company of  oNGC”. The      looks to expand its presence in other segments like
          Department of Investment and Public AssetManagement    LNG and lubricants. In the lubricants segment, the
          (Dipam) had  on July 21 used the same formulation      company plans to triple its market share in India in
          to  invite  expression  of  interest  from  investment  and   the next five years. Ariffin added that the company's
          merchant bankers to manage thetransaction. But, since   current lubricants market share in India is in single
          the offer meant transfer ofmanagement control from     digits.  Commenting on any plan  to  invest  in the
          government to oNGC, there was apprehension it would    exploration segment in India, Ariffin said, "No plans for
          trigger Sebi’s takeover code and compel oNGC to make   exploration in India at the moment. Need to look at the
          an open offer to acquire an additional 26 per cent stake   terms and conditions in India." In the petrochemical
          from the minority shareholders. So, Dipam on August 7   segment, the company is bullish on improving sales
          amended the terms to state that “HPCL will continue to   in  India.  "India
          be a Government company in terms of section 2(45) of the   is seeing a lot
          Companies Act, 2013, and will continue to be controlled   of consumer
          by the Governmentof India through  oNGC under the      demand and
          administrative control of the Ministry of Petroleum and   has  a  long  way
          Natural Gas”.  Though the government is cashing out on   to  go.  We  have
          its holding, the amended terms make it clear that it will   been supplying
          continue to retain control of HPCL, the official said, adding   many types of
          since there is no transfer of actual control, there would   chemicals  to
          be no requirement of an open offer.Another change DIPAM   India and these
          made in the July 21 Request for Proposal (RFQ) by saying   are the feedstock
          it wants to engage one advisor from reputed professional   o f  o ther
          consulting firms/ investment bankers/ merchant         do wns tr eam
          bankers/ financial institutions/ banks for managing the   pr o ducts  in
          disinvestment  process,  and  not  two  as  was  advertised   India," Ariffin  said. Ariffin  and  his  entire  executive
          previously. Besides, one reputed law firm with experience   team are in India on a week long trip to meet
          and expertise in mergers and acquisitions or takeovers or   customers. The  company  officials  also  met  non-oil
          strategic disinvestment would be appointed to act as legal   and gas companies like Infosys and Paytm in India to
          adviser, according to the notice inviting bids.        adopt better digitisation practices for its operations.



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