Gujarat Gas auction

Vol 15, PW 13 (12 Jan 12) News in Brief

British Gas is asking too high a price for its 65.12% stake of gas retailer Gujarat Gas, according to two companies that submitted bids by the 5pm deadline on (Tuesday) January 10.

GAIL, which declined to bid, also tells us that price, and its poor relationship with Gujarat state authorities, were deciding factors in its decision to stay away. Yet none of these concerns appear to have deterred ONGC, Torrent Power, GSPC, Oil India, BPCL or Adani Energy from bidding, say sources.

Unconfirmed reports suggest two private equity investors also bid, but it’s unclear in what capacity. Indian Oil and HPCL, earlier considered as serious contenders, declined to bid, but some suggest they could later join GSPC in a consortium, if GSPC is successful.

Citibank, which leads BG’s divestment, is expected to prepare a shortlist of likely winners within a week. “We don’t know how BG worked out the price,” says one bidder of the Rs4500cr ($870m) asking price, “but it really is very high!”