ONGC share sale delayed to 2nd half of 2011

A share sale in explorer Oil & Natural Gas Corp (ONGC) may be deferred to the second half of 2011 as the state-run firm reconstitutes its board of directors to meet regulatory needs, the Press Trust of India said.

The government plans to withdraw both its nominee directors and will set up a committee to select new candidates to the board, as it seeks to raise the number of independent directors, the news agency said citing an official it did not name. ONGC's board provides for nine functional directors including two government nominees, and it currently has only four independent directors. The Securities and Exchange Board of India requires listed firms to have an equal number of functional and independent directors. The share sale, expected to raise up to USD 2.8 billion, was likely to be delayed to the first week of April from an earlier launch date of March 15, sources had told Reuters earlier this month. ONGC's share sale is part of a wider plan by the government to sell stakes in about 60 state-run firms over the next few years to cut its fiscal deficit and garner funds for social welfare programmes. ONGC is not the only firm to have delayed its share sale. Steel Authority of India and Indian Oil Corp have also deffered their share sales to the next fiscal year due to weak market conditions.