Gujarat Gas sells LPG bottling to Reliance

Mohini Bhatnagar
01 February 1999

The Reliance group has acquired the liquefied petroleum gas bottling units of Gujarat Gas, the former Mafatlal group company that has now become a subsidiary of British Gas.This is seen as a means for Reliance to consolidate its presence in the LPG industry. Reliance has plans for substantial expansion of its LPG business in Gujarat.

Gujarat Gas has announced that its two units at Sanand and Lodhika in Gujarat are being transferred to Reliance Industrial Infrastructure at a price of Rs 1.31 crore. Reliance has also taken over Gujarat Gas''s liabilities and deposits from customers. Accounting for this, the gross price of the sale is considered to be Rs 8-10 crore.

The Gujarat Gas LPG units had performed poorly, prompting British Gas, which holds a majority stake in the company, to them up for sale last year. Among the companies that evinced interest in acquiring the units were Elf Aquitaine and Royal Dutch Shell However, they found Gujarat Gas''s asking price of Rs 35 crore too high.

While the sale is advantageous to Reliance, Gujarat Gas has got a disappointingly low price for these units. JM Financial Ltd brokered the deal.

The Gujarat Gas LPG units deal will be Reliance''s second acquisition in 1998-99. The first was its acquisition of the RPG group''s India Polyfibres, which was routed through Reliance Petro Products Ltd.