On the back of talks of a stake sale from Petronet LNG to Qatar Company, Mr P. Dasgupta, CEO and MD of Petronet LNG, said that the stake sale is indeed very likely. He added that the stake sale is needed for expansion of the rigs. As a result of all the planned expansion, the company will need an additional 7.5-10 million metric tonnes of LNG.
Excerpts from CNBC-TV18's exclusive interview:
How much stake is likely and what is the purpose of this stake sale to Qatar Company?As you know we have already got an approval for $100 million fully convertible bonds. This, when converted, would represent equity stake of anywhere between 7.5 per cent and 12.5 per cent, depending on the price at which these bonds are going to be converted.
The due diligence process has started off and we will have to negotiate the price at which the bonds will convert. I can't tell you a fixed percentage today. It will all depend on the price, which is agreed upon for the bonds to convert. The purpose of this stake is for the expansion of the rigs. We are creating a new terminal in Kochi; there is also the possibility of an LNG plant in Ratnagiri.
All put together, we will need additionally close to 10 million metric tonnes or maybe 7.5 million metric tonnes of LNG. Today, when we met the Finance Minister, we made a request for additional LNG of close to 7.5 million metric tonnes. We are today Qatar's single largest buyer in the world. Let's hope that we get another 7.5 million metric tonnes.
Can you give us a ballpark figure as to the price at which you want to convert these bonds, and will you be looking at selling some more stake as well?Generally, fully convertible bonds, the kind which several Indian companies have done in the last two years, the conversion premium is generally from 25-45 per cent, depending on the current market price.
So, at the lower end, if my current market price when we strike the deal is going to be Rs 60, then at 25 per cent it would mean that the conversion price could be Rs 75. If it is 40 per cent, then it could be Rs 85.
Do you want to seal this relationship with Qatar even further going forward by giving them a greater stake and maybe a role in the management of the company?Nobody has a role in the management of the company other than inviting a Director on the board. For the day-to-day management of the company we have three whole-time Directors, including me.
We have a board of 15 and the other 12 are either representatives of the promoting companies, which number four, and the rest are all independent Directors. If it is a board-managed company, then yes, to that extent we would be coming in into the management of the company through the board through board participation.