After the oil ministry opposed the Indian Oil divestment, the finance ministry has now asked them to consider cross holdings and special dividends to contribute to revenue mobilisation.
The finance ministry in that Empowered Group of Ministers (EGoM) meet told the oil ministry that the finance ministry was expecting Rs 4500 crore from this disinvestment and this is a Cabinet Committee on Economic Affairs (CCEA) decision. So, if the oil ministry was opposing IOCL divestment then they need to come up with an alternative plan to raise Rs 4500 crore. They have been given one week to deliberate on this.
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One of the proposals that came up in that EGoM meeting was a cross holding where Gas Authority of India (GAIL) would buy a percentage of shares in Indian Oil Corporation (IOCL) and the government would hence get some money. So, they have been asked to look at possibilities of cross holdings across PSUs and have also been asked to look at special dividends.
On the capex front Sudhir Vasudeva, CMD, ONGC said: “For the nine months we have achieved 99 percent of our capex targets and we are very much on track to achieve our annual capex plans.
Answering a query if they would announce special dividend, he said we will maintain whatever we had paid last year. Last year we had paid 100 percent in the first interim and another 80 percent we had paid in the second interim. We will try and maintain that but I cannot just commit anything here because we will have to discuss this in the board, said Vasudeva.
S Narsing Rao, Chairman, Coal India also said planned capital expenditure for the company was on track. “Our target is Rs 5000 crore, we will be spending Rs 5000 crore before March 31,” he added.
Rao declined to comment on issue of special dividend and said the dividend issue would be decided by the board.
However, the oil ministry did say in that EGoM that both Oil India and Oil and Natural Gas Corporation (ONGC) have capex plans and they are looking at acquiring assets abroad and hence they will not be able to give any special dividend payout. They do not have cash on their balance sheets. IOCL in any case is struggling just for subsidies so it will not be able to give a special dividend payout.
Therefore, it remains to be seen what plan the oil ministry comes up with. The finance ministry has said that in case they cannot come up with a plan then they will have to agree to the IOCL disinvestment or it will have to go back to the CCEA for further round of discussions.
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