Business Daily from THE HINDU group of publications
Thursday, May 17, 2007
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Business Daily from THE HINDU group of publications Thursday, May 17, 2007 ePaper |
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Corporate
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Alliances & Joint Ventures Petronet in talks with Spanish co Union Fenosa Our Bureau
New Delhi May 16 Petronet LNG Ltd (PLL) is at an advanced stage of negotiations with Spanish gas and electricity major Union Fenosa for it to come in as a stakeholder into the company by subscribing to PLL's foreign currency convertible bond (FCCB) issue. If the talks come through, the Spanish company is likely to take 8-10 per cent equity stake in PLL by subscribing to the latter's $100-million FCCB. Sources told Business Line, "Talks are in an advanced stage and a high-level team from Petronet is finalising the deal." Indications are that the Spanish team is also likely to visit India towards the end of this month to undertake due diligence of Petronet's liquefied natural gas import terminal at Dahej, Gujarat. Petronet has been looking at a strategic partner with experience in power generation as well as secure LNG supplies at affordable prices. Union Fenosa as a partner would fit the bill, as it has a total installed generation capacity of 9,952 MW, of which 27.4 per cent is operated outside Spain. The Spanish company also has significant interests in the gas business and is participating in the development of large LNG projects in Egypt and Oman. Petronet plans to set up a gas-based power plant near its import terminal in Dahej for external consumption. The FCCB was to raise funds to part-finance the expansion projects. The FCCB will be fully convertible into equity shares within five years of issue, and will raise the company's capital base 8-10 per cent.
Import terminal
Petronet plans to use the FCCB issue proceeds to partly fund construction of an import terminal at Kochi, with an initial capacity of 2.5 million tonne per annum and expansion of the Dahej terminal to 12.5 mtpa from the current 6 mtpa by end 2008.
More Stories on : Alliances & Joint Ventures | Petroleum
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