The state-owned Oil and Natural Gas Corporation (ONGC) will invest approximately Rs 15,000 crore in OPaL as part of a financial restructuring that will see GAIL exit the petrochemical firm. ONGC currently owns 49.36% of ONGC Petro-additions Ltd (OPaL), which operates a massive petrochemical plant in Dahej, Gujarat. GAIL (India) Ltd owns 49.21% of the company, with Gujarat State Petrochemical Corp (GSPC) owning the remaining 1.43 percent.

The ONGC board last week approved a financial restructuring of the petchem firm which had been making losses due to its high debt. ONGC will convert share warrants into equity, buy-back debentures and invest Rs 7,000 crore more equity, which will give it about 95 per cent stake, the company said in a stock exchange filing.

The proposal approved includes the "conversion of share warrants issued by OPaL and subscribed to by ONGC into equity shares upon payment of final call money of Rs 86.281 crore at the rate of Rs 0.25 per warrant," according to the proposal.

ONGC will also "purchase compulsory convertible debentures (CCDs) worth Rs 7,778 crore."

CCDs issued by OPaL with ONGC backing are currently held by financial institutions. ONGC will also invest Rs 7,000 crore in OPaL's equity/quasi-equity security, according to the company. Following implementation, OPaL would become an ONGC subsidiary. The financial restructuring "will augment ONGC's holding in OPaL and OPaL will become more profitable," it said, adding that the acquisition would cost Rs 14,864.281 crore in total.