The promoter-stakeholders of Petronet LNG Ltd seem to be warming up to the idea of getting a strategic partner to buy Asian Development Bank's (ADB) stake in the company.
The bank plans to sell its 5.2 per cent stake in Petronet. Mr A.K. Balyan, Managing Director & CEO, Petronet, said that there is a consensus building among promoter stakeholders – GAIL (India), ONGC, Indian Oil Corporation, and Bharat Petroleum Corporation – that the current corporate status of the company be kept intact.
Petronet has been formed as a joint venture by the Government with non-public sector character. In fact, the promoters were looking at increasing their stake in the company by acquiring ADB's stake. This would change the very character of the company into a public sector entity, as the combined stake of the promoters will be over 50 per cent (they hold 12.5 per cent each currently).
The shareholders agreement of Petronet is so structured that all the stakeholders will have to agree to the divestment proposal given by any one of them. Besides, the basic premise of the company is such that it gives it the present non-PSU structure.
Though the matter was not discussed at the company's board meeting on Tuesday, Mr Balyan said, “the promoters are in discussions with the Petroleum Ministry on the issue. I believe some progress has been made.”
Indications are that Petronet has been receiving feelers from prospective buyers, including financial institutions.
The other stakeholder is GDF SUEZ, the largest importer of LNG in Europe, which is the strategic partner, holding 10 per cent equity. The balance is held by public, financial institutional investors, and mutual funds. GAIL, ONGC, Indian Oil and Bharat Petroleum as well as GDF have the first right of refusal over Asian Development Bank's stake.
Sharing the company's financial performance for the January-March quarter and fiscal ended March 31, 2012, he said that during the quarter the company reported an over 19 per cent increase in profit against the same period last year. The profit stood at Rs 245.10 crore. This increase in profit was on account of additional volumes with better margins and higher operational efficiency, he said.
Turnover during the quarter increased 60 per cent against the same period previous year. The turnover for the quarter was at Rs 6,375.43 crore. The board has recommended a dividend of 25 per cent for the fiscal.
On Kochi terminal, he said that it is on schedule and is expected to be commissioned by October. As regards the existing Dahej terminal, he said that the capacity is being increased by five million tonnes a year beyond its present nameplate capacity of 10 mt. Also the company is in advanced stages of carrying out of a detailed feasibility study for five mt greenfield terminal at Gangavaram port at the East Coast.
The company may raise Rs 5,000 crore to partly fund the expansion of Dahej terminal and to set up the new terminal.