State-owned Indian Oil Corporation (IOC) has refused the proposal of buying back of shares in the government's 10 per cent disinvestment plan, as the company is overburdened with debt.
The government has planned to sell 10 per cent stake to degenerate about Rs 7,000 crore to the exchequer for which the Department of Disinvestment (DoD) will now float a Cabinet note next month to offer the stake through offer for sale (OFS) route, said the media report.
"DoD had written to IOC for a buy back. IOC replied saying it already has a huge borrowing and cannot buy back shares as it would require it to do further borrowing," a top official told media.
However, IOC's balance sheet statement at the end of April 2012 showed that their borrowing was over Rs 75000 crore while their cash and free reserves stood at Rs 307 crore and over 53,000 crore respectively.
The government aims to raise Rs 40,000 crore through PSU stake sale in 2013-14 and expects to mobilise around Rs 17,000 crore from Coal India disinvestment.
Meanwhile, the Finance Ministry has asked all cash rich PSUs like Coal India, ONGC and Oil India to consider buying government equity in other state-run firms if they do not have sufficient capex plans