No truth in BG sale of MGL stake

Vol 11, PW 15 (15 Nov 07) News in Brief

British Gas is emphatic in its dismissal of persistent rumours that it is about to sell its 49.75% equity stake in Mumbai gas retailing joint venture Mahanagar Gas, where GAIL also holds a 49.75% stake.

The latest round of rumours follows news of a letter that Hindustan Petroleum chairman Arun Balakrishnan wrote to the oil ministry seeking its help in buying the BG stake as an entry point into the gas distribution and retailing business in the lucrative Mumbai market. HPCL played up the fact that it has no exposure to the gas industry.

“It is quite foolish for HPCL to write to the ministry on this,â€‌ we hear. “If HPCL wants to buy BG’s stake it should write directly to BG.

â€‌ The oil ministry, we are told, has neither any influence nor any say in the matter. “If HPCL wanted to buy GAIL’s stake in MGL,â€‌ he adds, “they would be right in approaching the ministry.

â€‌ BG routinely carries out valuations of its businesses and JVs worldwide. “Nothing more should be seen into this,â€‌ says a source.