The Hindu Business Line : Petronet LNG stakes claim for 10 pc equity in Ras Gas train

Corporate - Mergers & Acquisitions
Markets - IPOs

Petronet LNG stakes claim for 10 pc equity in Ras Gas train — Public issue to open on February 19

Vinod Mathew

Dahej , Feb. 9

PETRONET LNG Ltd (PLL) is hitting the market with an IPO of 26.1 crore equity shares of Rs 10 each on February 19.

This will account for 34.8 per cent of the company's paid-up equity where at least 80 per cent would be available for the retail investor.

The remaining portion of the IPO, up to 20 per cent, would be available for institutional investors.

The PLL has already offered the equity to the promoters of the project at Rs 16 per share of Rs 10 each.

The current holding pattern of the company, with an authorised share capital of Rs 1,200 crore, has four promoters - IOC, ONGC, GAIL and BPCL - holding 12.5 per cent each while the strategic partner, Gaz de France (GDF) holds 10 per cent and the Asian Development Bank (ADB) 5.2 per cent.

The remaining 34.8 per cent has been kept aside for the public.

"The price band of the public issue should be known later this week, perhaps by Tuesday or Wednesday. This would be reached through the book-building route and the number of shares on offer to the public would be 26.1 crore shares of Rs 10 each," said Mr Suresh Mathur, CEO and Managing Director, PLL.

Meanwhile, the company is also planning to take an equity position in the third train of Ras Gas Company Ltd of Qatar, which will be ready for commissioning on March 23 and dedicated entirely for consumption by the Indian company.

It is understood that PLL would be staking claim to 10 per cent stake in the third train, which, at 4.7 million tpa, is arguably the largest LNG train in the world.

The third train has 1.5 million tpa additional capacity over the first two trains, at 3.2 million tpa each.

The equity is likely to acquired at cost price, it is learnt.

Earlier, speaking to newspersons after inaugurating the first LNG terminal of the country, the Union Minister of Petroleum and Natural Gas, Mr Ram Naik, said that he had agreed in principle to the demand of the Gujarat Chief Minister, Mr Narendra Modi, to allot five per cent equity in PLL to the State Government.

"This would be possible provided no hurdles are raised by the SEBI towards such a move. If a direct allotment is not possible, there is always the option of making a provision out of the 10 per cent reserved for the employees of the company," he added.

The five million tpa Dahej LNG regasification terminal has been built at a cost of Rs 2,600 crore, even as its principle feeder line between Dahej and Bijaipur has been completed at Rs 2,900 crore.

With another link - connecting Dahej and Uran - slated to be commissioned by April 2005, the total project cost has been kept at Rs 14,000 crore.

The remaining capital investment has come by way of Rs 1,600 crore for the two vessels that will ply the LNG between Qatar and Dahej and Rs 5,500 crore as the cost incurred for the liquefaction facility at Qatar.

The company, which has tied up its purchase agreement with Ras Gas for a 25-year-period, is now mulling doubling of capacity at the earliest.

This comes even as Ras Gas has made clear that it would be in a position to supply the company "with as much gas as required".

The Dahej terminal, completed in a record 36 months, a full six months ahead of schedule and at 10 per cent lower cost than originally envisaged, was constructed by a consortium led by IHI, Japan.

The shipping syndicate, which has entered into a time charter agreement with PLL for 25 years, is led by Mitsui OSK Lines, Japan.

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