Dec

31

ONGC To Acquire Imperial Energy - Shareholders Approve The Deal

Filed Under Energy, India Business, Indian Companies 

Indian Energy Giant — Oil and Natural Gas Corp (ONGC) — has made a timely European acquisition: Imperial Energy.

http://www.imperialenergy.com/i/imperial_energy_logo.gifImperial Energy is based in Leeds, UK and owns oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.

The ONGC has taken control of Imperial Energy Plc for GBP 1.3 billion (USD 1.9 billion) after an overwhelming 96.8% shareholders of London-listed Imperial Energy accepted the ONGC takeover offer.

The deadline for the state-owned firm’s 12.50 pounds per share offer closed yesterday and 99,241,110 or 96.8 per cent of the shares were tendered, ONGC Videsh Ltd (OVL) informed the London Stock Exchange.

OVL needed 90% shareholders to approve the deal, and got 96.8% approval. Imperial Energy will be delisted from from the London Stock Exchange pays in cash to the remaining 3.2% shareholders who were not in favour. The entire acquisition and subsequent delisting of Imperial Energy may take two to three weeks — which is quite fast by most standards.

ONGC Chairman R S Sharma said:

“ONGC ows the acquisition to government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam. This is the biggest overseas ever acquisition by OVL.”

OVL will fund the transaction through a combination of loans from the parent company (ONGC), wherein ONGC would lend USD 1 billion to fund the transaction at 5.96 % interest rate.

In 2003, OVL paid USD 1.7 billion to buy 20% stake in Exxon Mobil Corp’s Sakhalin-I field in Russia and USD 785 million for a stake in the Greater Nile project in Sudan.

Analysis & Projection: The weak UK pound and the better market capitalization of Asian companies could see more such takeovers in Energy and other sectors too.

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