GSPC offers $700m for Gujarat Gas

Vol 15, PW 22 (17 May 12) News in Brief

Uncertainly lingers over BG’s proposed 65.12% stake sale in retail subsidiary Gujarat Gas to GSPC and its partners ONGC and Bharat Petroleum.

Finance and legal experts from the GSPC-led consortium met their BG counterparts’ end-April in Mumbai but talks were unsuccessful. GSPC, we hear, refuses to increase its offer of Rs3800cr ($706m) for the 65.12% stake but BG wants at least Rs4500cr ($837m).

GSPC is also worried the gas regulator’s crackdown on CGD network tariffs and CNG charges could hit Gujarat Gas. If this were to happen, even Rs3800cr is too much, it argues.

State-owned GSPC, its retail arm GSPC Gas, ONGC and BPCL each hold 25% in the consortium. Should the deal go through, ONGC and BPCL will each offer 5% to state-owned Oil India and reduce their individual stakes to 20%.

SBI Caps has arranged Rs2000cr ($371.78m) for GSPC Gas through seven banks. “If the deal goes through,” we hear, “GSPC has the money ready.