State-owned Oil and Natural Gas Corporation (ONGC) will infuse about Rs 15,000 crore in OPaL as part of a financial restructuring exercise that will see gas utility GAIL being edged out of the petrochemical firm.

ONGC currently holds a 49.36 per cent stake in ONGC Petro-additions Ltd (OPaL), which operates a mega petrochemical plant at Dahej in Gujarat. GAIL (India) Ltd has 49.21 per cent interest and Gujarat State Petrochemical Corp (GSPC) has the remaining 1.43 per cent.

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 “conversion of share warrants issued by OPaL and subscribed 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,” it said.

Also, ONGC will “buy back compulsory convertible debentures (CCDs) of Rs 7,778 crore.”

CCDs issued by OPaL with backstopping support of ONGC are presently held by financial institutions.

ONGC will also invest Rs 7,000 crore in equity/quasi-equity security of OPaL, it said.

Upon implementation, OPaL would become a subsidiary of ONGC, it added.

The financial restructuring “will augment the holding of ONGC in OPaL and OPaL will become more profitable,” it said, adding that the total cost of acquisition would be Rs 14,864.281 crore.

OPaL was incorporated on November 15, 2006, as a mega, grassroots petrochemical complex to use naphtha produced by ONGC at Hazira as well as rich gas being imported at Dahej. It is an anchor tenant of Dahej PCPIR, Gujarat and has exported its products to more than 50 countries.