Corporate Oct 4, 2012
New Delhi/Ahmedabad: Gujarat government firm GSPC will acquire British energy major BG Group's majority stake in Gujarat Gas Co Ltd (GGCL) for over Rs 2,460 crore, a 12 percent discount to the market price.
The sale of its 65.12 percent stake in the nation's biggest private gas distributor will be completed in the first half of 2013.
GSPC Distribution Networks Ltd (GDNL), a subsidiary of Gujarat State Petroleum Corp (GSPC), will buy GGCL shares at Rs 295 apiece and it will pay Rs 2,463.8 crore to BG Group for the acquisition, GSPC said in a separate statement.
The sale price implied a 12 percent discount to GGCL's current market value. At closing, GGCL fell 2.1 percent to Rs 336, giving the company a market value of about Rs 4,310
GGCL had touched a 52-week low of Rs 288 in June this year, while it had scaled highs of Rs 458.85 in November. As per SEBI regulations, GSPC will have to make a mandatory open offer for a minimum of 26 percent of GGCL.
Citi advised BG, while Rothschild advised GSPC.
"We are pleased to announce this acquisition that enhances GSPC Group's presence in the state. The acquisition is in the long-term interests of the industrial and retail
customers of Gujarat," GSPC Group Managing Director Tapan Ray said.
GCCL supplies gas to more than 3.49 lakh domestic, commercial and industrial customers and serves over 1,75,757 compressed natural gas (CNG) users. It has network of around
49 CNG stations in Bharuch, Ankleshwar, Surat and surrounding areas in Gujarat.
The stake sale in GGCL meant BG had now agreed disposals worth USD 4 billion, edging it closer to a $5 billion target.
"With this announcement, we have non-core asset sales agreements in place that will release some $4 billion from our balance sheet," BG's Chief Executive Officer Frank Chapman said in the statement.
In February, BG announced plans to sell off assets in downstream distribution and power generation to enable it to channel resources into more lucrative upstream oil and gas
production projects. The agreement involves the sale of BG Asia Pacific
Holdings Pte Ltd's 65.12 percent controlling interest in GGCL, India's largest private sector natural gas distribution company.
"We have made outstanding progress since announcing our two-year $5 billion release programme only eight months ago, and we remain focussed on the successful delivery of our growth projects," Chapman said.
The deal is consistent with GSPC's stated objective of expanding presence in upstream and downstream segments of the energy value chain and realising the vision of developing
Gujarat as a natural gas driven economy, GSPC statement said.
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