Sulking HPCL boycotts AGM at Mangalore Refinery
Anger within Hindustan Petroleum over ONGCs attempts to force it to sell its remaining stake in Mangalore Refinery has spilled out into the open.
How else to explain HPCLs sullen absence from ONGCs first Annual General Meeting with MRPL shareholders at the refinerys sports club in Mangalore on 30th September With its stake reduced to 16.97% after ONGCs takeover in August 2002, HPCL has only two directors on the MRPL board - marketing director NK Puri and finance director CV Ramulu. Neither attended the meeting.
Other than the ONGC board members, the only outsider was MP Modi from ICICI Bank. Puri told us he would not be able to make it for the AGM as he was going abroad, MRPL vice president (finance) and company secretary LK Gupta tells PETROWATCH.
We dont know why Ramulu didnt attend. Contacted by PETROWATCH, Ramulu declined to comment on his absence despite being in the country.
A day earlier on 29th September, he was in Delhi to sign a crude supply agreement with ONGC finance director RS Sharma. We know why HPCL did not participate in the AGM, reveals an ONGC source.
They know that MRPL doesnt need them anymore. HPCL is visibly upset with ONGCs attempts to force it to sell its stake in MRPL.
On 24th September, ONGC submitted a proposal to the oil ministry demanding HPCLs exit from the Mangalore refinery with an offer to buy its entire stake at Rs37.75 per share for a total consideration of Rs1121.75cr ($239m). Unless ONGC attaches an attractive premium and promises us product security, we wont give up our stake, a top HPCL official tells us.
Read the fine print to understand HPCLs displeasure. It has little to do with product security and everything to do with the offer price.
Confides another HPCL official: Actually theres no real concern over product offtake, it can be sorted out. Its only the price ONGC is offering that is crucial.
HPCLs board is yet to reply to ONGCs proposal, well aware that it stands no chance against the barrage of ONGC lobbying at Shastri Bhawan. We dont want to come in between MRPL and ONGC.
Give us an attractive price and the stake is yours, said the HPCL official.