Imperial Energy shareholders accept ONGC offer

December 31st, 2008 - 6:27 pm ICT by IANS  

New Delhi, Dec 31 (IANS) The overseas arm of state-run Indian upstream oil major, Oil and Natural Gas Corp, Wednesday announced that more than 96 percent of shareholders of the Leeds-based Imperial Energy have accepted its offer for acquisition at $1.89 billion.In a regulatory statement to the London Stock Exchange, ONGC Videsh Ltd (OVL), the overseas arm of ONGC, said it has received acceptances from 96.8 percent of shareholders of Imperial Energy for its offer of 12.50 pounds per share, before the deadline of 1 p.m. London time, for confirmation of shareholder intention.

OVL required approval from 90 percent of the shareholders for the acquisition deal to get through. Imperial Energy will have to be delisted from the London Stock Exchange following its buyout.

Following the overwhelming positive response, OVL said its offer for shares and convertible bond was “now wholly unconditional”. The share offer will remain open till further notice, with 14 days notice before closure.

Imperial Energy has strategic assets in Russia and Kazakhstan, crucial for the Indian company as it is trying to build up resources in the oil-rich Siberian blocks.

“Acquisition will provide OVL with the opportunity to establish presence in western Siberia, one of the world’s largest oil and gas producing regions, by acquiring an asset with significant long-term production and reserves potential,” said an OVL statement Wednesday.

Interestingly, OVL indicated that it would participate in future auctions of hydrocarbon blocks, which lie near to current assets of the London-based company, indicating that Imperial Energy’s block will be its “platform” for further expansion in the region.

“OVL looks forward to both developing the Imperial Energy licences and growing its asset base by participating in upcoming auctions for licence blocks close to Imperial Energy’s existing blocks,” said the statement.

The company said the acquisition will give “OVL an opportunity to expand its presence in Russia beyond its participation in the Sakhalin project and will further enhance its position as one of the industry’s leading exploration and production companies.”

This will be OVL’s biggest overseas acquisition ever. Previously, it had spent about $1.7 billion to buy a 20 percent stake in Sakhalin-1 field.

The deal will be funded with loans from the parent company. ONGC said in October that the company has “enough liquidity to do two more such transactions”.

ONGC’s board approved the offer in August when the oil prices were still over $100 per barrel, after reaching a peak of $147 in July.

The Russian government gave the requisite approvals for the acquisition deal in November, following which the Indian cabinet provided its final permission Dec 9.

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