British Gas in a hurry to close Gujarat Gas sale

Vol 15, PW 23 (31 May 12) People & Policy
     

BG seems in a hurry to sell its BSE-listed south Gujarat retail subsidiary before Shaleen Sharma steps down from his post as Gujarat Gas managing director on June 30.

Sharma, 54, has been a key player in the Gujarat Gas stake sale deal since November 8, when BG first shocked the market by announcing it wanted to exit. But in just one month Sharma will move to BG (India)’s Mumbai office as deputy country head.

“As far as I know BG would rather close the deal before Sharma leaves Ahmedabad,” says a former company official. Soft-spoken Sharma is a popular figure in the CGD sector.

He will be replaced at Gujarat Gas on July 1 by forty-eight year old Sugata Sircar, a chartered accountant with BG since July, 2006. BG is also under pressure to speed up its 65.12% stake sale to GSPC and its partners ONGC and Bharat Petroleum as the Gujarat Gas share price continues to drop because of negative stock market sentiment.

In mid-May, BG even showed willingness to substantially compromise on its Rs4500cr ($815m) asking price. “BG’s new asking price is closer to the Rs3800cr ($688m) quoted by GSPC,” we hear.

However, this has yet to be accepted by the GSPC-led consortium. “BG may have proposed a new price but we have yet to approve this,” says a GSPC source.

In early June, BG India president Walter Simpson is expected to meet GSPC managing director Tapan Ray to finalise the sale. Other senior officials from both companies will also be present at the meeting, which Simpson called for in a letter sent to Ray in mid-May.

As far as GSPC is concerned, it’s happy the Gujarat Gas share price is falling as this will give it an edge in price negotiations.