Gujarat Gas Co Ltd (GGCL), a subsidiary of British Gas of UK, is buying out a Gujarat-based chemical company, KK Chemicals & Dyes Pvt Ltd, which will act as a licensed dealer for distribution and supply of gas to commercial and domestic consumers.
According to sources, GGCL has decided to acquire the entire share capital comprising 3,250 equity shares of Rs 100 each in KK Chemicals & Dyes, besides making a fresh equity investment of Rs 3.93 crore in the company. The deal has already been approved by the board of the two companies and is awaiting regulatory approvals.
The acquired company will carry out the business of transmission, distribution and supply of natural gas in Gujarat, the sources added. "The idea is to tap the large backward area in the state where supply of gas to end consumers has enormous potential," officials said.
They said that since GGCL is a registered dealer so it cannot act as a licensed dealer, thus it has decided to acquire the company and register it as a licensed dealer for transmission, distribution and supply of natural gas in the state.
Subsequent to the acquisition, the wholly owned subsidiary will purchase natural gas from GGCL and other gas players and make it available to industrial, commercial and domestic customers.
The acquisition is also permitted under law, since GGCL does not have any previous financial/ technical collaboration or trade mark agreement in India in similar or allied fields of activity, the official added.
However, analysts pointed out though GGCL claims that it does not have any technical or financial collaboration in similar field, BG Plc group through its subsidiaries and affiliates already has a large presence in such areas.
British Gas Asia Pacific Holdings Pte Ltd, Singapore, (a wholly owned subsidiary of BG Plc, UK), set up a subsidiary in India by acquiring majority 65.13 per cent shareholding (641,250 shares) of Mafatlal Industries Ltd (also the Indian partner) in Gujarat Gas Company Ltd.
The company was permitted to act as a registered dealer for transportation, distribution and supply of natural gas and bottling and marketing of liquefied petroleum gas.
