NEW DELHI, Oct 21 (TIWN): Not one but two oil companies - BPCLNSE 1.36 % and HPCLNSE -0.03 % - may go under the hammer this fiscal with state-owned oil and gas explorer ONGC now looking to sell its stake in recently-acquired refiner HPCL to a strategic investor, possibly an overseas oil company, to regain debt-free status of the company existing prior to the expensive buy.

The plan for Hindustan Petroleum Corporation Ltd (HPCL) follows the government's go ahead to invite a strategic investor for Bharat Petroleum Corporation Ltd (BPCL) where the Centre owns 53 per cent stake.  Government sources indicated that the board of ONGC has informally debated on continuing to hold on to HPCL as its subsidiary since no synergy was flowing from its acquisition but the expensive buy had only added debt burden on the parent.

"The matter may be brought up again before the board to finalise future course of action," sources added.  An ONGC spokesperson could not be contacted and a questionnaire mailed to the company on the issues remained unanswered.  In of its most expensive buys, ONGC last year paid Rs 36,915 crore to purchase the government's entire 51.11 per cent stake in HPCL. The acquisition turned the character of ONGC from being a debt-free company to one with no cash and loads of debt on its books. ONGC took loan of close to Rs 25,000 crore to buy the government's equity in HPCL.  In addition, HPCL's acquisition has so far not worked to the advantage of ONGC as synergies have not flowed in. Moreover, HPCL failed to recognize ONGC as its promoter till recently. Only after the SEBI's intervention, HPCL decided to recognize its majority shareholder as promoter. ONGC has just one member on the HPCL board.