Fuelled In A Different Direction: ADB Sells Petronet Stake
Fuelled In A Different Direction: ADB Sells Petronet Stake
Asian Development Bank/ADB has sold its complete 5.2% stake in Indian gas supplier Petronet LNG for a sum of INR 714 crores which is around USD 116.8 million. The sale was made through block deals, according to BSE data. ADB sold around 39 million shares of the Indian gas company on the BSE in block deals. The deals were made at an average price of Rs. 183.2 per share.
The companies which brought the share included Citigroup Global Mauritius Pvt Ltd and HDFC Mutual Funds, according to BSE data. Citigroup purchased around 8.8 million shares. HDFC top 200 Fund gained about 3.77 million shares. Around 4.67 million shares were purchased by HDFC Equity Fund.
Following the sale of the stake, the shares of the gas supplier fell by 3.8 percent ending at Rs. 185.50 per share on the BSE. ADB had launched the share sale for getting $120 million in funds, according to a Reuters report.
Petronet is India's biggest liquified natural gas supplier and importer. The sale of the shares follows a long standing dispute and conflict between the principal promoters of Petronet and its management. The Chairman of Petronet is currently the oil secretary. The promoters of Petronet namely IOC, ONGC, BPCL and GAIL had been interested in buying the stake from ADB originally but the management of the company opposed this.
The move was opposed on the grounds that it would case the PSU holding to cross more than half (50%) causing the LNG importer to fall under the category of an Indian government entity. Currently, Petronet is registered as a private company even though the chairman is a civil servant and the PSUs hold around 50% share in it.
The Oil Ministry refused to grant permission to the PSUs for acquiring the ADB stake. The ADB had offered to sell the stake to the PSUs . GAIL, Bharat Petroleum Corporation Ltd, Oil and Natural Gas Corporation Ltd and Gail currently hold 12.5 % stake each and have the first right of refusal.
The board of the 4 promoter companies had approved the first right of refusal over sale of the ADB stake and cash buyout of the interest of ADB. But this multilateral lending agency was barred from selling its stake to the PSUs.
ADB sold the stake through a public sale in stock exchanges according to Don Purka, the director in the private sector operations of ADB. The stake sale allows the bank to pursue its development mission through investment in novel projects in India as well as other developing countries, Purka reportedly told Business Line.
