Gujaratís other calling card

Gujaratís other calling card

Whether it is female infanticide, education or health indicators, Modiís Gujarat...
Safe assets

Safe assets

The asset disclosures for the 2014 Lok Sabha elections...

GAIL sells part stake in China Gas Holdings for Rs 385 crore

Comments 0
SummaryChina Gas has exclusive rights to set up gas distribution projects in 42 cities in China.

State-owned gas utility GAIL India Ltd on Friday said it has sold more than a fourth of its 4.6 per cent stake in Hong Kong-listed city gas distribution firm China Gas Holdings for Rs 385 crore.

GAIL, which made a strategic investment of Rs 137 crore by acquiring 210 million shares of China Gas in 2005, has sold 60 million shares, companyís chairman and managing director BC Tripathi told reporters here.

ďWe had acquired the shares at HK$1.1 and we sold the shares at HK$8.2,Ē he said.

The gas utility plans to keep a small strategic interest in the company that will help it retain its board position in China Gas Holdings. ďOur gross realisation is Rs 385 crore,Ē he said, adding that the company has to pay taxes like capital gains on this realisation.

The board of GAIL had accorded approval to partially divest its equity stake in China Gas for recoupment of entire initial investment, while retaining the strategic advantage as envisaged at the time of initial investment. ďWe sold the stake to capitalise on the high price of the shares on the Hong Kong stock exchange,Ē he said.

China Gas has exclusive rights to set up gas distribution projects in 42 cities in China. GAIL picked up equity in the company as China was keen to replicate Delhiís success in using natural gas as a vehicular and domestic fuel in its cities, primarily Beijing, before the 2008 Olympics.

GAIL saw synergies in city gas/CNG business. Now that the city gas distribution business is being pursued by GAILís wholly owned subsidiary, GAIL Gas, the company feels the investment in China Gas does not appear to meet the original objectives.

Sources said GAIL has earned only Rs 16.29 crore as dividend from China Gas over seven years. As the current share price is more than HK$7, GAIL believes it is a good time to sell and re-invest the earnings from the stake sale.

GAIL India Q2 net profit drops 7% on LPG losses

New Delhi: GAIL India Ltd, the nationís largest natural gas distributor, on Friday reported a 7 per cent drop in its September quarter profit after

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...