IndianOil gets board nod to acquire 5% stake in OIL
New Delhi   01-Dec-2007
State-run IndianOil on Friday said that it has received the board approval for acquiring a 5% stake in Oil India Ltd (OIL) from the government. In a filing to the Bombay Stock Exchange (BSE), IOC said it would acquire 1,07,00,220 equity shares totaling to 5% of OIL's paid up capital at a price equivalent to its initial public offer's (IPO) issue price. The IPO of OIL is slated for the first quarterof2008. OIL plans to issue 2.64 crore shares of par value of Rs 10 each to the public. Out of this, 24.04-lakh shares will be given to its employees. Currently, the government holds 98.17% stake in the company, while the remaining is with the employees. After the IPO, government stake will come down to 78.43%. The government is divesting 10% of its equity to the general public and is selling a similar quantum to Indian Oil, Bharat Petroleum and Hindustan Petroleum. The remaining stake will remain with the employees. The sale and purchase of these stakes will be completed within two days after the issue price of the public offer is determined through the book-building method and approved by the board of directors of OIL. The closing will be completed prior to allotment of the equity shares through IPO. Bharat Petroleum Corp Ltd has already secured its board approval for buying 2.5% stake in OIL, amounting to 5.3 million equity shares. The government earlier agreed a 10% IPO offering in Oil India, and a preferential allotment of 10% of the exploration firm to three state-run refiners. HPCL has also been allowed to buy 2.5%stakeinOILbutitsboardisyetto approve the purchase. The refiners will buy holdings in OIL at a price equal to the issue price of the equity shares.