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OilMin undecided on allowing oil PSUs to buy ADB stake

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Press Trust of India New Delhi
Last Updated : Jan 20 2013 | 2:43 AM IST

The Oil Ministry is yet to decide on allowing GAIL India, Indian Oil, Bharat Petroleum and Oil and Natural Gas Corp (ONGC) to acquire the Asian Development Bank's (ADB) stake in Petronet LNG Ltd.

"We have received requests from all the four companies (who are promoters of Petronet) for buying ADB's (5.2%) stake. We are yet to decide on it," Oil Secretary GC Chaturvedi told reporters here.

The ADB had on August 23 offered to sell its 5.2% stake in Petronet LNG Ltd (PLL), in which the four state-owned oil and gas companies hold a 12.5% stake each.

Gas utility GAIL, refiners IOC and BPCL and exploration firm ONGC have already informed the ADB of their decision to exercise their Right of First Purchase/Refusal on the multilateral lending agency's stake.

"We are debating on the issue. If allowed, the stake of the four PSUs will rise above 50% in PLL, which will some implications like the company coming under purview of CAG audit," he said.

However, he hastened to add that PLL coming under the CAG was "after all, not a bad thing".

The Oil Secretary is also the Chairman of Petronet.

Gaz de France International (GDFI) holds a 10% in PLL and also has the right of first refusal over ADB's stake. In case the French energy giant also decides to exercise its right, ADB's 5.2% stake will split between the five partners in proportion to their current shareholding.

While the state-run Indian firms would get 1.08%, or 81.25 lakh shares each, GDFI would be eligible for a 0.867% stake.

Sources said GDFI is unlikely to exercise its right and if that happens, ADB's 5.2% stake will be split equally among the four PSU promoters.

The price payable to ADB would be the lower of either the average of the weekly high and low of the closing price of PLL during the six months preceding the date of purchase, or the average of the weekly high and low of the closing price of PLL during the last two weeks preceding the date of purchase.

For 81.25 lakh shares, the consideration works out to about Rs 120 crore, sources said, adding that the promoters, as per the new takeover code, would have to make an open offer for acquiring a further 26% stake from minority shareholders if they buy the shares in one transaction.

PLL's constitution states that participation of PSUs would be to the extent of 50% and the joint venture company would not be a government company.

Sources said the legal opinion taken by the promoters states that PLL would not be considered a government company following an acquisition of additional equity by the PSUs from ADB.

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First Published: Nov 22 2011 | 4:39 PM IST

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