New Delhi: The government today approved a share split in and issue of bonus shares by ONGC, the country's biggest oil and gas producer, as a prelude to the company's follow-on public offer (FPO) in March 2011, reports PTI.
According to sources, the Cabinet Committee on Economic Affairs (CCEA) approved splitting a share of ONGC with a face value of Rs 10 into two shares of Rs 5 each. It is also said to have approved a 1:1 bonus issue. However, no official statement was made till late this evening.
The state-owned ONGC had suggested to the government that the company's stock be split ahead of the FPO. The government plans to sell 5% of ONGC shares to mop up Rs10,800 crore through the FPO. Post the offer, government's shareholding in ONGC would come down to 69.14% from the current 74.14%.
Shares of ONGC closed up by 3.23%, or Rs40.30, at Rs1,288.50 on the BSE today.
ONGC had appointed two international auditors (DeGolyer and MacNaughton; and Gaffney, Cline & Associates) to certify its oil and gas reserves. The energy producer usually gets its reserves audited every five years, but decided to get a certification in the third year itself this time because of the FPO.
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