The ONGC board has given its nod for acquiring Asian Development Bank's stake in Petronet LNG.
The Bank had sounded off the promoter shareholders of Petronet expressing its intent to exit the company. The four public sector promoters – ONGC, Indian Oil Corporation, Bharat Petroleum Corporation, and GAIL (India) – own 12.5 per cent each in Petronet.
There are indications that the promoters may look for 1.08 per cent each. The ONGC board gave its approval on November 4.
However, this may not be easy. Sources privy to the development told Business Line that the public sector promoters will need Government approval, and at any given point, cannot cumulatively hold more than 50 per cent in Petronet.
This stipulation is also reflected in the company's Articles of Association. Currently, the combined shareholding of public sector promoters is 50 per cent, according to the latest shareholding pattern submitted to the stock exchanges.
The other stakeholders include GDF SUEZ, the largest importer of LNG in Europe, which is the strategic partner, holding 10 per cent equity. Asian Development Bank holds 5.2 per cent stake, 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 stake.
This is not the first time that the Bank has expressed such an interest. In early 2008, too, it had wanted to exit the business, but was persuaded to stay on.