ONGC to consider special dividend before stock sale

State-run explorer Oil and Natural Gas Corporation (ONGC) will come out with a special dividend ahead of the proposed stake sale by the government even as the cabinet committee on economic affairs (CCEA) today approved ONGC's plan to split the stock into two and issue bonus shares.

The board of directors of ONGC will meet on 16 December to consider inter alia payment of a special dividend for the financial year 2010-11 and matters relating to the proposed dilution of government stake in the company.

Besides dividend payment, the ONGC board will consider a bonus issue of shares in the ratio of 1:1 and division of the stock into two, the corporation said in a filing with the Bombay Stock Exchange (BSE).

The government has advised ONGC to complete the stock split and bonus issue, besides the payment of special dividend before it can proceed with the stake sale.

ONGC said the government has conveyed the decision for disinvestment of 5 per cent paid-up equity capital of ONGC out of its shareholding.

The government is expected to raise about Rs11,000 crore by divesting a 5 per cent stake in ONGC by March.