State-owned Hindustan Petroleum Corp Ltd (HPCL) will buyout shares of financial institutions ICICI Bank, ICICI Venture and HDFC in Prize Petroleum to make the oil exploration firm its wholly-owned subsidiary.
HPCL and its partners had floated Prize Petroleum in 1998 to explore and produce oil and gas in India and abroad. HPCL owns 50% stake in the company, while ICICI Bank held 35% interest. ICICI Venture had 10% stake in and HDFC the remaining 5%.
"The Board of HPCL on April 15 approved acquisition of balance 50% shares held by other joint venture partners in Prize Petroleum Company Limited," a top company official said.
HPCL will acquire 70 lakh shares held by ICICI Bank in Prize Petroleum at par value of Rs 10 each amounting to Rs 7 crore. Similarly, it will acquire 2 lakh shares held by ICICI Venture Capital for Rs 2 crore and 1 lakh shares held by HDFC for Rs 1 crore.
After the acquisition, Prize Petroleum will turn into a wholly owned subsidiary of HPCL.
It will also convert five crore Cumulative Convertible Preference Shares at the face value of Rs 10 each held in Prize Petroleum into five crores fully paid equity shares at par value of Rs 10 each.
HPCL was previously trying to buyout the financial institutions at discount but ICICI Bank and ICICI Venture wanted par value for their shares, the official said.
After the buyout, Prize Petroleum will takeover the oil and gas exploration and production business of HPCL.
