Iffco, Kribhco may buy 20% in Petronet LNG

Praveen Chandran
24 September 2002

Mumbai: The equity structure of Petronet LNG (PLL) is all set to be finalised. Two leading fertiliser firms, Iffco and Kribhco, are in the final round of talks with PLL to pick up 20-per cent stake in the company.

PLL is setting up a 5 million-tonne LNG terminal project at Dahej, Gujarat. Iffco and Kribhco have proposed to invest Rs 160 crore for picking up 10-per cent equity each in the project, which is slated to be completed in 2005.

The four oil majors Bharat Petroleum Corporation, Gas Authority of India, Indian Oil Corporation and Oil and Natural Gas Corporation together hold 50 per cent of PLLs paid-up capital. Each public sector unit holds a 12.5-per cent share.

The France-based Gaz de France has a 10-per cent equity and Rasgas of Qatar holds another 10 per cent. Out of the balance 30 per cent, the government of Gujarat has a 5 per cent share. The remaining 25 per cent had been offered to non-government companies, financial institutions and banks. Sources close to the development say the remaining 5-per cent stake will be offloaded to foreign financial institutions like American Insurance Group.

It is, however, learnt that the Mitsui OSK Lines-NYK Line-K Line-Shipping Corporation of India consortium has signed a deal with five major global banks for a $285-million loan at 225 basis points above Libor to part-fund its LNG shipping contract for PLL. "The loan agreement was signed by the four sponsors of the joint venture consortium and the bankers in London recently," the sources say.

A consortium of banks led by ANZ Investment Bank and ABB Structured Finance, Sumitomo Bank, Fuji Bank and Credit Lyonnais have together agreed to provide $285 million for building two new LNG tankers of 1,38,000 cubic metre capacity each at a total cost of $370 million.