Engie seeks to sell stake in India’s biggest LNG importer

Bloomberg

France’s Engie SA plans to sell its entire 10 percent holding in India’s biggest importer of liquefied natural gas. GDF International, an Engie unit, has written to the four Indian state-owned companies that together own half of Petronet LNG Ltd. to offer shares in proportion to their holding in the company, Petronet said in a stock-exchange filing.
“It is mandatory for GDF to offer its holding to other founders as per the shareholders agreement,” R.K. Garg, finance director of Petronet LNG, said in a phone interview. “Only if the other founders don’t buy, GDF can sell it to anyone it wishes.”
Explorer Oil and Natural Gas Corp., refiners Bharat Petroleum Corp. and Indian Oil Corp., and gas distributor GAIL India Ltd. form the founder group, with a 12.5 percent stake each in Petronet. If any of the founders buy the stake, Petronet, which operates as a joint venture, could become a wholly government-owned company that would reduce its flexibility to take independent decisions.
The founders may not buy the stake, said A.K. Srinivasan, director finance at ONGC. “It is not necessary for us to buy,” he said. “The structure has to be maintained otherwise government approval is required.”

ADB STAKE
In 2014, Asian Development Bank had sold 39 million shares of Petronet LNG. It had first offered these to the four founders, who chose not to buy the shares. It eventually sold its 5.2 percent stake in the open market.
Engie holds 75 million shares in Petronet valued at about 29 billion rupees ($434 million) at current market prices. Petronet rose 0.3 percent at 387.55 rupees as of 2:47 p.m. after falling as much as 2.2 percent following the announcement.
“I’m not sure they can sell a 10 percent stake easily in the market,” said Sabri Hazarika, a Mumbai-based analyst at Phillipcapital India Pvt. “Some other strategic investors can come in like companies from Qatar or the UAE.”
Subir Purkayastha, director finance of GAIL India, A.K. Sharma, the finance head of Indian Oil and P. Balasubramanian, director finance at BPCL, couldn’t be reached for comment on their mobile phones.