The BG Group said on Monday that the process to divest its 65.12% stake in Gujarat Gas Company Limited is going on and it is looking forward to bringing the talks with GSPC-led consortium to a conclusion.
“We are progressing with the Gujarat Gas stake sale process and we look forward to bringing it to a conclusion,” a BG India spokesperson said in an e-mailed response to DNA. However, there is no specific timeframe for finalising the deal.
The spokesperson described as speculation reports in certain sections of the media that the stake sale talks have hit a hurdle as BG Group is not happy about the price being offered to it. “We do not comment on speculation,” the spokesperson said.
The spokesperson said that BG has built a successful relationship with GSPC and the Gujarat government over the last 15 years, and it continues to work with them.
A senior government official denied that the two Central PSUs – ONGC and BPCL – want to opt out of the race to buy Gujarat Gas citing the high asking price by BG. “This is utter rubbish. ONGC and BPCL are firmly with GSPC, and are as eager as us to seal the deal,” said an official, requesting anonymity.
The state government has also claimed that an Ahmedabad-based corporate giant, with interests in power and other businesses, is behind the malicious campaign aimed at trying to derail the ongoing talks.
“This group was keen on entering city gas distribution (CGD) business. It had opted out of the race because of high valuations of Gujarat Gas, but it is now finding the deal very attractive. The only way it can get a shot at Gujarat Gas now is if ongoing talks collapse, and this is what it is trying to do,” alleged an official.
He also alleged that one of the board members of Gujarat Gas was in cahoots with the private player to derail the ongoing talks. The GSPC-led consortium emerged as the lone bidder for acquiring BG’s 65.12% stake in Gujarat Gas. The consortium has offered around Rs3,000 crore for the stake.
However, this is sharply lower than Rs4,500 crore, BG was hoping for when it announced its decision to sell Gujarat Gas stake in November 2011. This is because of sharp fall in Gujarat Gas’ market valuation.
“This is a double whammy for BG. Not only has market valuation of Gujarat Gas taken a hit, even the rupee has depreciated from around Rs47 – 48 per dollar in Nov to below Rs55 – 56 currently,” said an official.