Board nods ONGC stock split, special dividend
State-owned Oil and Natural Gas Corp (ONGC) on Thursday approved a special dividend, free share and a stock split before the government’s planned stake sale in March, chairman R S Sharma said.business Updated: Dec 16, 2010 22:57 IST
State-owned Oil and Natural Gas Corp (ONGC) on Thursday approved a special dividend, free share and a stock split before the government’s planned stake sale in March, chairman R S Sharma said.
In a pre-divestment bonanza, the government will rake in Rs 5,074 crore from the Rs 32 per share (320%) special interim dividend approved by the board.
The board also approved the issue of one free share for each held (1:1 bonus issue) and splitting each equity share of Rs 10 face value into two shares of Rs 5 (2:1 stock split).
“The total dividend payout will be Rs 6,844 crore, of which Rs 5,074 crore will go to the government (which holds 74.11% stake in the company),” Sharma said. Besides, ONGC will also pay Rs 1,163 crore in the form of dividend tax to the government on the special interim dividend.
While the record date for payment of special dividend has been fixed on December 21, ONGC will seek shareholder nod for the stock split and bonus issue through a postal ballot.
Post stock split and bonus issue, one share of Rs 10 will become four shares of Rs 5 each. Total issued shares of the company will increase from 2,139 million to 8,556 million.
“Based on the current indications, the follow-on public offer (of 5% of government’s shares) should be opening around the first week of March,” Sharma said.
ONGC’s cash reserves will dip to Rs 7,000 crore after payout of Rs 8,007 crore in special dividend and dividend tax, said DK Saraf, director, finance, ONGC.
The five independent directors, needed on board to meet listing norms issued by the Securities and Exchange Board of India, will be in place before January end when the draft prospectus will be filed.