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The Adani Group and Gujarat State Petroleum Corporation (GSPC) are looking at various equity options for their Rs 4,600-crore, five-million-tonne-pe-annum (mtpa) liquefied natural gas (LNG) terminal at the Mundra special economic zone in Gujarat. Bankers in the know said, in addition to looking at bringing in an equity partner, the option could include going in for an initial public offering (IPO) for Mundra. Of the total project cost, GSPC would tie up for 70 per cent from debt and look at the rest in equity from its partner, or an IPO. "GSPC had communicated to us that among other equity options, it could look at an initial public offering as well," said an investment banker.
GSPC and Adani Group have been planning to sell a 25 per cent stake in the terminal for over two years. GSPC holds a 50 per cent stake in the project, while Adani Group holds a 25 per cent.
In August 2013, eight players filed an expression of interest for the 25 per cent stake. GSPC and Adani had zeroed in on three - India Gas Solutions (IGS), Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC). Other than the shortlisted players, the bidders included GAIL India, Petronet-LNG, Torrent Energy, Japan's Mitsui & Co and Toyota Tsusho Corporation. IGS was formed in 2011 as a 50:50 joint venture between BP and Reliance Industries after BP bought a 30 per cent stake for $7.2 billion in 21 oil and gas production sharing contracts in India, including the KG-D6 block.
The due diligence on the stake sale was completed in December 2013 and players were asked to submit commercial proposals based on capacity booking by January 15, 2014.
The bids were to be opened in March 2014 and a final closure of the deal was to take place by June 2014. However, in the wake of elections in May 2014, the process was put off. Since then, there has been no progress on the project. A banker said: "IOC is keen on picking up stake in the Mundra terminal. If that deal does not happen, IPO may be an option." IOC already partners GSPC group company Gujarat State Petronet in three cross-country pipelines and also partners Adani in its retail gas networks.
The company, which partners for 25 per cent stake will be required to pump in Rs 400 crore over three years for the project.
According to a company executive, Petronet LNG, despite its experience, was not short-listed as there could have been a conflict of interest. On the other hand, IOC and ONGC holds a 12.5 per cent stake each in Petronet-LNG. IOC is also setting up a five mtpa LNG terminal at Ennore in Tamil Nadu.
