GAIL keen to buy 5.2% stake in Petronet LNG

State-owned gas utility GAIL India is keen to acquire 5.2% stake in Petronet LNG for Rs 600 crore. The Asian Development Bank (ADB) has offered to sell its 39 million shares or 5.2% stake in Petronet, which is valued at over Rs 614 crore.

To restrict the public sector holding in the company at 50% GAIL, Oil and Natural Gas Corp, Indian Oil and Bharat Petroleum hold a 12.5% stake each. Under the Share Holders' Agreement (SHA), the five have the first right of refusal over ADB stake.

For buying 5.2% stake of ADB, GAIL has proposed to the Oil Secretary G C Chaturvedi, who is the Chairman of Petronet. If other state firms are also interested, the ADB stake can be split equally among GAIL, IOC, ONGC and BPCL with each buying 1.3% stake. ADB stake being bought by state firms will turn Petronet into a public sector company with shareholding of state firms rising above current 50%. GAIL is agreeable to this as it will bring more accountability in running Petronet.

From 2004 ADB has held a 5.2% stake in Petronet LNG. ADB always looks to exit its equity investments once it believes that the development mission has been accomplished.