France’s Engie SA plans to sell its 10% holding in Petronet LNG, India’s biggest importer of liquefied natural gas.
GDF International, an Engie unit, has written to the four Indian state-owned companies that together own half of Petronet to offer shares in proportion to their holding in the company, Petronet said in a stock-exchange filing on 8th March.
Under the terms of the shareholder agreement, it is mandatory for GDF to offer its holding to other founders first. Only if the other founders don’t buy can GDF sell to anyone it wishes.
Oil and Natural Gas Corp. (ONGC), Bharat Petroleum Corp. and Indian Oil Corp., and gas distributor GAIL India Ltd. form the founder group, with a 12.5% stake each in Petronet. If any of the founders buy the stake, Petronet, which operates as a joint venture, could become a wholly government-owned company that would reduce its flexibility to take independent decisions.
But A.K. Srinivasan, director finance at ONGC, told Bloomberg that the founders may not buy the stake: “It is not necessary for us to buy,” he said. “The structure has to be maintained otherwise government approval is required.”
In 2014, the Asian Development Bank sold 39 million shares (or 5.2% stake) in Petronet LNG on the open market after it first offered them to the four founders.