PSUs cannot buy ADB stake in Petronet
13 May 2012 11:27 PM GMT
The oil ministry has refused permission to public sector oil companies for acquiring Asian Development Bank’s stake in Petronet LNG Ltd (PLL) so as to keep the nation’s largest liquefied natural gas importer a private company.
The ADB on 23 August last year offered to sell its 5.2 per cent stake in PLL, in which GAIL, Indian Oil (IOC), Bharat Petroleum (BPCL) and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent stake each and have a first right of refusal.
The board of all the four promoter companies approved exercising the first right of refusal over ADB stake and cash buyout of the multilateral lending agency’s interest. However, the ministry, whose secretary is the chairman of PLL, vetoed the proposal at a 26 March meeting, sources privy to the development said.
‘Keeping in view the specific approval of the Cabinet on restricting the aggregate Government/PSU participation to 50 per cent of paid-up capital for providing the desired flexibility to Petronet LNG Ltd to operate in a dynamic LNG import market, the existing shareholding structure in the context of PSU participation, should be retained,’ minutes of the 26 March meeting stated.
The ADB on 23 August last year offered to sell its 5.2 per cent stake in PLL, in which GAIL, Indian Oil (IOC), Bharat Petroleum (BPCL) and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent stake each and have a first right of refusal.
The board of all the four promoter companies approved exercising the first right of refusal over ADB stake and cash buyout of the multilateral lending agency’s interest. However, the ministry, whose secretary is the chairman of PLL, vetoed the proposal at a 26 March meeting, sources privy to the development said.
‘Keeping in view the specific approval of the Cabinet on restricting the aggregate Government/PSU participation to 50 per cent of paid-up capital for providing the desired flexibility to Petronet LNG Ltd to operate in a dynamic LNG import market, the existing shareholding structure in the context of PSU participation, should be retained,’ minutes of the 26 March meeting stated.
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