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FE NEWS SERVICE
Gas Authority of India Ltd (Gail) will pay Rs 530 crore for a 2.5 per cent stake in the Oil and Natural Gas Corporation (ONGC). The public sector gas transmission company has already paid up Rs 450 crore for the ONGC stock, confirmed Gail chairman CR Prasad.
He said the company expected to transfer another Rs 80 crore to the Central kitty by the end of the month. The ONGC shares have been priced at Rs 163 a share.
The ONGC will pick up a 5 per cent shareholding in Gail, at a price of Rs 60 a share. The Indian Oil Corporation (IOC) is expected to buy another 5 per cent stake in Gail for the same price.
Prasad said a dialogue had already begun with ONGC on the possible structure of a strategic alliance between the gas producer and the gas transmission company. He said in the immediate future, the synergy, spun out of the equity swap between ONGC and Gail, would enable the two companies to jointly bid for deep water oil exploration blocks.Gail also plans to partner ONGC in its bid to exploit coal-bedmethane blocks. Prasad said the two companies would not only collaborate in future operations, but also build a synergy in their present scope of work.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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