The Gujarat High Court on Tuesday gave sanction to scheme of amalgamation of Hazira Gas Private Limited with Hazira LNG Private Limited, both joint venture companies between Shell Gas BV and Total Gas Electricite Holdings, France.
The scheme of amalgamation was sanctioned by Justice Abhilasha Kumari, who observed, "upon considering the facts and circumstances of the case and the material on record, and taking into account the contentions raised by the respective parties in their affidavits and counter affidavits as well as the submissions made at the Bar, this Court is satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, have been effectively dealt with by the petitioners, adequately, therefore, the same do not survive."
Hazira Gas Private Limited, the Transferor Company, was incorporated to undertake marketing and distribution of LNG. However, due to several reasons, the Company could not commence the commercial activities though it had entered into various agreements and developed the marketing infrastructure.
The transferee company, Hazira LNG Private Limited, belongs to the same group and is engaged in the business to explore, develop, refine, liquefy, re-gasify, transport, distribute, market and trade in Natural Gas and LNG.
The amalgamation of the two companies was proposed to undertake the entire integrated business activity under one Company and to realign the group structure.
Both companies were incorporated to carry out complementary functions for the same business of Natural Gas. Hazira Gas Private Limited, was promoted for marketing and distribution of LNG. It was initially envisaged that the activity shall be carried out for purchasing natural gas from the international market and supply it to various end users.
The company had entered into contracts with various suppliers and end users but due to frequent changes in the government policy and applicable tax structures, the operations of Hazira Gas Private Limited were not found to be economical, counsel for the two companies submitted before the court.
Hazira LNG Private Limited was originally promoted to undertake the business of receipt, storage and re-gasification of LNG encompassing all operations and maintenance activities of the LNG facilities. However, subsequently, it also undertook the marketing activities.
In order to avoid duplication of administering two companies promoted by the same group, it was thought appropriate to achieve economic synergy by undertaking all operations by one single entity. Since the initial set up was put in place by Hazira Gas Private Limited prior to 2008, the Board of Directors of these Companies thought it appropriate to merge the commercial activities from April 2008 for administrative and commercial exigencies.
