New Delhi: Oil and Natural Gas Corporation (ONGC) will inject about Rs 900 crore in Mangalore Refinery and Petrochemical Ltd (MRPL) after buying out the Aditya Birla Group's stake in the joint venture for Rs 59.5 crore.

After acquisition of A V Birla Group's 37.39 per cent stake for Rs 2 per share, ONGC would pump in about Rs 600 crore as additional equity capital for gaining controlling stake in the 9 million tonnes refinery, ONGC officials said.

Besides, ONGC would also pump in about Rs 300 crore as working capital in the loss- making refinery where Hindustan Petroleum Corporation (HPCL) is equal partner with Birlas.

Earlier on August 1, Birla Group companies Hindalco, Indian Rayon, Grasim Industries and Indo Gulf informed the Bombay Stock Exchange (BSE) about their decision to sell their 29.71 crore equity shares in MRPL for Rs 2 a share.

As a result, ONGC would have close to 60 per cent stake in MRPL while HPCL stake would fall from 37.39 per cent to 15-16 per cent.

ONGC sources exuded confidence of inking the deal by this month after approval from the Cabinet, for which Petroleum Ministry is likely to send a proposal soon.

The state-run exploration firm's takeover of the refinery would coincide with financial engineering by financial institutions who have agreed to convert part of their Rs 4,500 crore debt into equity and waiver of interest liability.

For ONGC, which recently got permission from government to sell petrol and diesel, acquisition of majority control in MRPL is a step closer to its objective of entering retail marketing of petrol and diesel.

PTI