OVL is eying to save $1 billion by picking just 51 per cent stake in Imperial Energy. The decision is taken after many deliberations as the deal is not much attractive due to the steep decline in crude oil rates in the international market. However, the government gave its nod to the proposed acquisition on the grounds of energy security.
ONGC Videsh (OVL) had approached the UK Takeover Panel to extend the time limit for the proposed acquisition of the UK's Imperial Energy. The company said that it suffered delay in approval of the proposal from the Indian government due to recent attack in its financial capital, Mumbai. However, the request was turned down by the UK penal on the grounds of financial loss to the company being acquired, and violation of rule Rule 2.5 which stipulates the necessity to make an offer within given time.
OVL, the overseas investment arm of India's largest oil exploration company Oil & Natural Gas Corp (ONGC) said in a filing, “In the wake of terrorist attacks, the government's attention is focused on establishing new measures (including anti-terror laws and a federal investigating agency) and strengthening the existing ones to counter the threat of terrorism. Consequently, the appropriate committee of the Indian government has not yet had a chance to convene to approve the offer document.”
The chairman of Imperial Energy, Peter Levine said, “If the acceptance condition has not been satisfied by this deadline, Bidco (Jarpeno, the Cyprus-incorporated wholly-owned subsidiary of OVL) will be entitled to lapse the share offer, resulting in Imperial Energy shareholders being thereafter unable to tender their shares pursuant to the share offer of 1,250 pence per share.”
Source: Top News