GAIL DIVESTS 5% STAKE IN CHINA CITY GAS DISTRIBUTION COMPANY…
GAIL DIVESTS 5% STAKE IN CHINA CITY GAS DISTRIBUTION COMPANY CHINA GAS HOLDINGS FOR A WHOPPING RS.385 CRORES
New Delhi, Jan 29 India’s largest state-owned gas utility GAIL India has divested a near five per cent stake in China’s city gas distribution company China Gas Holdings for US $ 64 million or Rs. 385 crore.
GAIL’s Chairman and Managing Director B C Tripathi told a news conference here that GAIL had invested Rs. 137 crore in 2005 to acquire 210 million shares of China Gas. About 60 million shares had now been sold with the appreciation being about seven times.
GAIL had bought the shares when the scrip per unit was about US $ 1.15 and when it was sold after a eight year period, the stock had risen to US $ 8.20 per share benefitting GAIL India greatly.
The gas utility will however retain a small strategic interest in the company that will help it retain its board position in China Gas Holdings. “Our gross realisation is Rs. 385 crore. The company has to pay taxes like capital gains on this realisation,” Tripathi said adding China Gas has exclusive rights to set up gas distribution projects in 42 cities in China.
On the flip side of business, GAIL reported a 7 per cent drop in its September quarter profit after it made losses in the cooking gas (LPG) business. Net profit in July-September dropped to Rs. 915.67 crore as compared to Rs. 985.38 crore a year ago. “Major reason for decline in profit after tax is the Rs. 377 crore loss suffered on LPG,” Tripathi pointed out..
Although the price accruing on account of sale of LPG was 19 per cent higher at Rs. 50,000 per tonne, the segment suffered loss as the company had to shell out Rs. 700 crore to in fuel subsidies. GAIL had to use imported gas (LNG) for manufacturing cooking gas after supplies from Reliance Industries Limited’s KG-D6 fields dried-up, it was revealed.
Mr. Tripathi said the profits were impacted because of drop in gas that GAIL transported during the quarter to 95 million standard cubic meters per day from 106 mmscmd. “This was primarily because of lower supplies of gas from KG-D6 and less production from Panna-Mukta and Tapti fields,” he said.
GAIL imported 11 shiploads or cargos of liquefied natural gas (LNG) in the first half of current fiscal. It would import 19 cargos during the remaining 2013-14 fiscal. Import of LNG at the Dabhol terminal in Maharashtra would be resumed next month, as shipments had halted in the monsoon period because the port does not have a breakwater facility to guard ships against rough seas.