New Delhi/Mumbai: The government plans to sell a 5 percent stake in energy explorer Oil and Natural Gas Corp (ONGC) in the last week of November or the first week of December, two sources directly involved in the deal said on Wednesday.
Prime Minister Narendra Modi`s government has introduced long-awaited reforms in the oil sector, freeing diesel prices and raising natural gas prices - measures which should be positive for ONGC and other oil marketing companies.
Presentations to investors on the share sale, worth about $2.8 billion at current market prices, are likely to start from Nov. 17 and will run for about a week, said the sources, declining to be named as the details were not yet public.
"There is a plan to hold roadshows in the U.S., London and Singapore from Nov. 17 to 23 to attract global investors," said one of the sources.
The share sale is part of the government`s plan to raise a record $9.5 billion via asset sales in the current financial year through March 2015 to help plug its fiscal deficit.
Aradhana Johri, secretary at the divestment department, which oversees the sale of holdings in state companies, was not immediately available for comment.
The government has appointed five banks - Citigroup, HSBC Securities, ICICI Securities, UBS Securities and Kotak Mahindra Capital - to manage the sale.
In 2012, the government sold 5 percent of ONGC to raise about 140 billion rupees. It retains about 69 percent of the company.
ONGC, the country`s biggest oil explorer, plans to raise overseas output in two stages to 60 million tonnes of oil plus oil-equivalent gas by 2030, or 1.2 million barrels a day.
After oil sector reforms, ONGC`s share of subsidies is expected to fall substantially this year, said the official. He also said there was no plan to sell stakes in any other oil company this year.
