France-based GDF International, which holds a 10% stake in Petronet LNG, has decided to sell its entire stake worth over Rs 2,900 crore.
GDF, a unit of French energy giant Engie, has written to Petronet — India’s biggest importer of liquefied natural gas — expressing its desire to exit the company. It has offered the stake to Petronet’s principal promoters — GAIL India, Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL).
“We have been informed by GDF International, which is holding 10% equity share capital in the company, that they proposed to divest their entire shareholding in the company,” Petronet said in a filing.
Petronet said GDF International has also sent a communication to each of the promoters offering “a first right of purchase/refusal in relation to the proposed sale of 10% equity shares in the company in the same proportion in which the promoters are holding equity shares in the company.”
The four promoter firms hold 12.5% stake each in Petronet. Going by this proportion, they are each entitled to buy 2.5% of GDF’s stake. But it is unlikely that anyone of them will exercise that option given that Petronet has been structured as a private company.
At present, the four companies hold 49.99% stake of Petronet. If any of the promoters were to buy GDF’s stake, the combined shareholding of state-owned firms will rise above 50% and will lead to conversion of Petronet into a public sector company. Though Petronet is registered as a private company, Government of India’s Secretary in the Ministry of Petroleum and Natural Gas is its Chairman.
By its private nature, the company is currently out of purview of CAG audit as well as any Parliamentary scrutiny. The ministry’s desire to keep the company private had led to none of the four promoters exercising their right of first buy when in August 2011 ADB offered to sell its entire 5.2% stake in Petronet.
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