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Government Mulls $2 Billion Stake Sale in Oil And Natural Gas Corporation

  • A cabinet panel on Wednesday will discuss whether to sell a stake in the flagship Oil and Natural Gas Corp that could fetch the cash-strapped government over $2 billion, a minister said.The ministers will "meet tomorrow to consider proposals relating to disinvestment in Oil and Natural Gas Corporation (ONGC)", Oil Minister S Jaipal Reddy said Tuesday, without elaborating, according to the Press Trust of India.The government has said earlier it is mulling whether to sell a five per cent stake in the state-run exploration company through an auction but has given no other details.
  • It owns 74.1 per cent of ONGC and would sell another 427.7 million shares, reducing its holding in the company to 69 per cent.The move could fetch the federal government around 118 billion rupees ($2.4 billion) at the current stock price.Last September, India delayed plans to sell shares in ONGC for a fourth time amid poor stock market conditions.The planned share offer was part of a broader plan by the Congress-led government to raise as much as 400 billion rupees from sales of shares in state-run companies.So far, the government has been able to raise only 11.5 billion rupees.The privatisation drive is targeted at generating funds to run social welfare schemes for the country's hundreds of millions of poor and reducing India's gaping fiscal deficit.

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