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MRPL to merge with HPCL

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HPCL in talks with parent for share transfer; plans ₹75,000 crore capex in 5 years

ONGC-owned Hindustan Petroleum Corporation Limited (HPCL) plans to merge its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL) with itself.

Early this year, the government transferred its 51% stake in HPCL to ONGC for ₹36,915 crore.

HPCL owns 17% stake in MRPL while its parent ONGC holds a majority 71.63% stake in the company.

‘Economies of scale’

“We are in talks with ONGC for transfer of shares. HPCL supplies more than it produces. MRPL will bring economies of scale,” said HPCL chairman Mukesh Kumar Surana.

With MRPL, we can unload crude at Mangalore and get freight advantage. We have a big R&D facility in Mangalore. We have refinery in Vizag in the East Coast, Mumbai in West Coast, Bathinda in North and Mangalore in South. We can integrate facilities and create lots of synergies.”

When asked about the timeline for the merger, Mr. Surana said, “We are in discussions with ONGC on this as the decision of three boards are involved and we are progressing on that.”

The company plans to invest ₹75,000 crore over five years across its business segments to fuel growth and expansion. Of this, ₹33,303 crore is earmarked for refinery expansion, ₹29,554 crore for marketing, ₹774 crore for renewables and R&D, and ₹12,000 crore for joint ventures.

HPCL plans to expand capacity at its Visakhapatnam refinery from 8.33 million metric tonnes per annum (mmtpa) to 15 mmtpa at a cost of ₹20,928 crore. The company’s Mumbai refinery is being expanded from 7.5 mmtpa to 9.5 mmtpa at a cost of ₹5,060 crore.

HPCL is also setting up a 9 mmtpa greenfield refinery cum petrochemicals complex in Barmer, Rajasthan for ₹43,129 crore and is a partner in the 60 mmtpa Ratnagiri Refinery and Petrochemicals Ltd.

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Printable version | Jan 25, 2020 11:08:33 PM | https://www.thehindu.com/business/mrpl-to-merge-with-hpcl/article24823487.ece

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