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GAIL keen to buy ADB's stake in Petronet LNG
New Delhi, March 07, 2008
GAIL India Ltd is keen to buy Asian Development Bank's 5.2
percent stake in Petronet LNG Ltd, but the move may be vetoed
by the Petroleum Ministry to allow steel baron Lakshmi N
Mittal entry into LNG business.
ADB is likely to exit from Petronet by the year end as its
internal regulations do not permit it to don two caps of
equity investor and debt provider.
GAIL Chairman U D Choubey has written to Petronet, with a copy
marked for Petroleum Secretary M S Srinivasan who is also the
chairman of PLL, staking claim over the ADB stake by virtue of
promoters having the first right of refusal in case the
multilateral agency was to exit the company.
GAIL, ONGC, IOC and BPCL, who hold 12.5 percent stake each in
Petronet, should be offered ADB stake, Choubey wrote, adding
that in case other promoters not being interested, his company
would be keen to take ADB's entire equity.
Industry sources said the promoters may not find favour with
the ministry as it would make Petronet a state-run firm.
Instead, it may favour Mittal, who has been in dialogue with
Petronet for the ADB stake buy.
Choubey, however, saw merit in Petronet becoming a PSU as he
wrote in the 28th February letter that "the same shall have
long term strategic merit given the increasing importance of
energy security in the country".
If the promoters were to even pick up half of ADB's 5.2
percent, with the remaining being taken by GdF of France,
which too has first right of refusal, PLL will become a PSU.
Though Petroleum Secretary is the chairman of Petronet and the
company enjoys government patronage, it has stayed away from
the scrutiny a PSU is subjected to by its sheer nature of
shareholding.
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