Torrent and Think Gas swoop to buy Essel Gas

Vol 22, PW 21 (08 Aug 19) Midstream & Downstream
     

Financial problems at TV mogul Subhash Chandra-promoted Essel Group are presenting a golden opportunity for Ahmedabad-based Torrent Gas and Noida-based Think Gas to expand their CGD presence.

This report learns the PNGRB is evaluating a Torrent proposal to acquire 49% in Essel Gas that would give it partial control of Dholpur, a sleepy former princely state in eastern Rajasthan with just 126,000 inhabitants, won by Essel under CGD-IX. In a parallel move the PNGRB cleared a proposal by Think Gas to acquire a 49% stake in Bagpat Green Energy, a JV between Essel and Avinash EM Projects, incorporated on July 12, 2018, which holds the licence for Bagpat district in western Uttar Pradesh with its 1.3m population, won in CGD-VIII.

For now Essel retains the remaining 51%. But a PNGRB source tells us Torrent and Think will acquire the remaining 51% stakes in Dholpur and Bagpat after the first five years of authorisation in line with PNGRB rules banning gas retailers from selling more than 49% equity within five years of winning a licence.

Promoted by billionaire Subhash Chandra, the debt-laden Essel Group is scrambling to meet a September 30 deadline to repay lenders Rs7500cr ($1bn). For Torrent this is good news as it consolidates its position in the CGD sector with more acquisitions.

Last year Torrent acquired troubled Pune (rural)-based retailer Mahesh Gas and Moradabad-based retailer Siti Energy.