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JM Financial To Advise Government On HPCL Stake Sale To ONGC

JM Financial Ltd. has been appointed as the transaction advisor to the government’s over Rs 37,000 crore stake sale in Hindustan Petroleum Corporation Ltd. (HPCL) to Oil & Natural Gas Corporation Ltd. (ONGC).

Besides, Cyril Amarchand Mangaldas has been selected as the legal advisor for handling the stake sale.

With ONGC and HPCL under the administrative control of the oil ministry, the latter has appointed Protocol Valuers Ltd., for suggesting valuation at which the government’s 51.11 percent stake in HPCL should be sold to ONGC, people with knowledge of the matter said.

The process of selection of transaction advisor was kicked off by the Department of Investment and Public Asset Management (DIPAM) in July and as many as five consultants - including JM Financial, EY, PwC, ICICI Securities and Rothschild (India) Pvt. Ltd. had submitted expression of interest (EoI).

The other law firms who were in the race as legal consultant included Crawford Bayley and Co., Luthra and Luthra, Suman Khaitan and Company and Hammurabi and Solomon Partners.

The Cabinet Committee on Economic Affairs (CCEA) had on July 19 given in-principle approval to strategic sale of the government's existing 51.11 percent stake in Hindustan Petroleum to Oil and Natural Gas Corporation, along with the transfer of management control.

At the current market price, the HPCL stake is valued at more than Rs 37,500 crore.

The merchant banker will assist the government on modalities of disinvestment and the timing as well as recommend the need for intermediaries required for the process. It will do a business valuation of HPCL, structure the transaction, suggest measures to fetch optimum value and assess positioning of the strategic sale. Besides, it will prepare all documents like information memorandum (IM), confidentiality and transaction agreements such as pact to sale and the share purchase agreement.

The legal advisor will review and advise on all legal contracts, titles of properties, assets, real estate, intellectual property rights and contracts with employees. It will also draft transaction related documents and advise on the structure of the transaction, including compliance with SEBI guidelines and stock exchange listing norms.

The government is keen to complete the transaction within the current fiscal.

 

Last Updated: 04-Sep-2017

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