New Delhi, Aug. 6: State-owned GAIL (India) Ltd plans to sell a part of its 4.6 per cent stake in Hong Kong-listed city gas distribution firm China Gas Holdings.
“The board of GAIL has accorded approval to partially divest its equity stake in China Gas to recoup its entire initial investment, while retaining the strategic advantage as envisaged at the time of the initial investment,” minister of state for petroleum and natural gas Panabaaka Lakshmi told the Rajya Sabha in a written reply today.
GAIL had invested Rs 137 crore to acquire 210 million shares of China Gas in 2005. The PSU plans to keep a small strategic interest in the company to retain its board position.
China Gas has exclusive rights to set up distribution projects in 42 cities in China. GAIL had picked up a stake in the company because China was keen to replicate Delhi’s success in using natural gas as a vehicular and domestic fuel in its cities, primarily Beijing, before the Olympics in 2008.
GAIL saw synergies in the city gas/CNG business. At present, GAIL Gas — the wholly owned subsidiary of GAIL — is pursuing the city gas distribution business, and the company sees no point in continuing its investment in China Gas.
Moreover, the shares of China Gas are performing well on the Hong Kong Stock Exchange, resulting in a market capitalisation of around $4.4 billion.
Sources said GAIL had earned only Rs 16.29 crore in dividends on its investment in China Gas over seven years. As the current share price is more than Hong Kong $7, GAIL considers the time ripe to sell and reinvest the proceeds in overseas upstream assets.
Indian Oil Corporation (IOC) plans to cut crude oil imports from Iran by over 23 per cent this year, petroleum minister M. Veerappa Moily said today.
IOC imported 1.6 million tonnes (mt) of oil from Iran in 2012-13. For the year beginning April 2013, it “has entered into a term contract for the import of 1.2mt crude oil from Iran,” he said in a written reply to the Rajya Sabha.
IOC, which is the country’s third largest importer of Iranian oil after Essar Oil and Mangalore Refinery and Petrochemicals Ltd, imported 0.6 mt in the first quarter of this fiscal.