Financial Daily from THE HINDU group of publications
Wednesday, Jul 13, 2005

News
Features
Stocks
Port Info
Archives
Google

Group Sites

Corporate - Outlook


ONGC may no longer provide interest-free loans to OVL

Richa Mishra

New Delhi , July 12

OIL and Natural Gas Corporation (ONGC), which has been providing interest-free loans to its subsidiary ONGC Videsh Ltd (OVL), is now weighing the option of doing way with this provision.

According to official sources, ONGC is looking at an arm's length relationship with OVL. However, before taking a final decision, the parent company is examining the aspects of inter-corporate loans under the existing laws. The move is to bring in good corporate governance practices, officials said.

They further said that it would be ensured that the move does not impact the top line or bottom line of OVL.

OVL is the overseas arm of ONGC. During 2004-05, OVL repaid Rs 653 crore of loan and advances to ONGC. The finances for the operations of OVL are provided by ONGC in form of loans, interest-free advance and equity. OVL today has 12 overseas assets and is actively seeking more opportunities across the world. With a long-term target of acquiring 60 MMTPA of equity oil and gas overseas by 2025, OVL is currently working towards a goal of 20 MMTPA by 2010. In fact, its efforts have been supported by the Government, which has allowed OVL exclusive empowerment by giving it single-window clearance for overseas upstream projects irrespective of investments involved.

For 2004-05, OVL has reported a 78 per cent jump in net profit to Rs 761 crore compared to Rs 428 crore in the previous fiscal. The OVL board also recommended a maiden dividend amounting to Rs 105 crore, 35 per cent of its paid-up equity share capital of Rs 300 crore.

The company's consolidated gross revenue increased 72 per cent to Rs 6,026 crore from Rs 3,502 crore in 2003-04. During 2004-05, OVL repaid in full the bank loan of Rs 248 crore for its Vietnam project. OVL's consolidated oil and gas production overseas rose 31 per cent to 5.063 million tonnes from 3.868 million tonnes a year ago. Of this, gas and condensate production in Vietnam increased to 1.349 billion cubic meter and 0.039 million tonnes during 2004-05.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page


Stories in this Section
Aurobindo Pharma gets tentative USFDA nod for generic AIDS drug


Madhucon bags Rs 319-cr NHAI project in Bihar
REI Agro's $28-m FCCB issue
Arvind Mills raises $37.2 m through GDR issue
Honour for BHEL chief
Raymond to buy auto parts co
Hindustan Tin plans Rs 50-cr expansion
Bengal Tools to strengthen tie-up with Sifang Group of China
ONGC may no longer provide interest-free loans to OVL
Electrosteel plans to boost exports to Europe through JVs
Indian Oiltanking plans entry into LNG terminalling
Hindalco to pursue organic, inorganic route for growth — Board okays stock split
Sami Labs plans IPO by 2006-end
Toyota bullish on Innova
JCB India sells more machines this year
Centre may move CLB again for more directors on Morepen board
New finance chief for ADA Enterprises


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line