Adani Gas to pick up 20-% equity in IOC - GAILventure Green Gas
12 August 2011
Adani Gas, an arm of Adani Enterprise, plans to pick up 20 per cent equity in Green Gas Limited, a Gail - Indian Oil Corporation (IOC) joint venture.
Green Gas, in which Gail and IOC hold 22.5 per cent each, supplies city gas and compressed natural gas in Agra and Lucknow in UP.
Uttar Pradesh State Industrial Development Corporation holds a 5-per cent stake in the company, while Aditya Vikram Birla Group and financial institutions IDFC and UTI together hold 50 per cent in it.
Rajeev Sharma, chief executive officer, Adani Gas said the company had signed a memorandum of understanding with Green Gas to pick up a 20-per cent equity in the company.
He added the group would merge its assets with Green Gas, saying since both companies were in the same city, they decided to work together.
SBI Capital Markets would evaluate assets of Green Gas and Adani Gas and it has already started drawing a financial model and a business plan for Green Gas. It has also been asked by the board to try and arrange private equity infusion upto a specified limit.
IOC and Gail decided on inducting Adani Gas as a strategic partner in Green Gas on account of its gas pipeline infrastructure in Lucknow. With the combined infrastructure of both companies, Green Gas is expected to get ready infrastructure to service most parts of the city.
Adani had spent around Rs65 crore to lay steel and plastic pipelines across around 60 kilometres in Lucknow but the company had to suspend work midway following its failure to source gas. It was subsequently forced to stop work after the Petroleum and Natural Gas Regulatory Board intervened in 2009.
Green Gas has syndicated a term loan of Rs153.6 crore for financing the ongoing city gas distribution expansion and capital expenditures.