SBI, IDFC keen to acquire 10pc each from Petronet

Anupama Airy

New Delhi, Jan 3: State Bank of India (SBI) and Infrastructure Development Finance Company (IDFC) are in advance stages of negotiations with Petronet LNG Limited (PLL) for picking up a 10 per cent equity stake each in the company. Even Unit Trust of India (UTI) has evinced interest in picking up another 10 per cent equity in PLL and has held two rounds of discussions with the promoters of the company.

While PLL has already tied up for 70 per cent equity, it has appointed SBI Capital Markets Limited as the arrangers for tying up the remaining 30 per cent equity in the company.

It may be noted here that 50 per cent of PLL’s equity is being jointly held by the four oil and gas PSUs, including IOC, ONGC, BPCL and GAIL (with a 12.5 per cent stake each). Out of the balance 50 per cent equity, which is to be held by private sector players, French gas major GDF International has already stepped in as a strategic partner and has picked up 10 per cent equity in PLL. Another 10 per cent equity has been offered to RasGas of Qatar, the supplier of LNG to PLL’s upcoming terminals at Dahej and Kochi.

While GDF has already signed the shareholders agreement with PLL and also appointed one of its nominee, Jacques Gautier, on the board of directors of the company, RasGas has communicated that it would start due diligence soon to firm up its plans. Senior petroleum officials said PLL was at present finalising gas sales and purchase agreement (GSPA). “The status of the GSPA was reviewed recently and international consultants White & Case have been asked to redraft the GSPA,” they added.

Sources said SBI Caps, arrangers for private sector equity in PLL, was currently compiling an information memorandum for circulation to potential investors. ABN Amro, financial advisor to PLL, has also submitted the first draft of the financial model which was currently being looked into by auditors Ernst and Young for vetting and comments.

Both the documents would be ready for issue immediately on finalisation of the GSPA, sources said, adding, “IDFC and SBI will also start their due diligence once the GSPA is finalised”.Soon after signing of the GSPA and other crucial contracts required for issue of the information memorandum by SBI Caps, PLL proposes to tap the debt markets, both rupee and foreign currency.