GSPC takes 65.12 per cent in Gujarat Gas for Rs2,464 crore

British oil and gas producer BG Group Plc yesterday agreed to sell its controlling stake in Gujarat Gas Company Ltd (GGCL) to state-owned Gujarat State Petroleum Corp (GSPC) at below market value for Rs2,463.8 crore ($470 million).

GGCL is India's largest private sector company in the natural gas transmission and distribution business and is amongst the largest gas trading firms in India.

Berkshire-based BG sold its 65.12 per cent stake in its Indian subsidiary GGCL to GSPC's wholly owned subsidiary Gujarat Distribution Networks for Rs295 per share. FIIs and the public hold the remaining 34.88 per cent stake.

BG acquired the stake in 1997 from Gujarat Industrial Investment Corporation and Mafatlal Group for Rs170 crore, but the company was in April seeking around Rs4,000 crore for its majority stake based on GSPC's then market capitalisation of nearly Rs5,500 crore.

But the deal value fell after BG realised it would not regulatory approval and sold it at a 12 per cent discount to GGCL's yesterday price of Rs336, giving the company a market value of about Rs 4,310 crore.

Other bidders who had shown interest in buying the stake but dropped out to high valuations include Adani group, Torrent group, UK-based private equity firm Actis, German utility company E.ON AG and Spanish natural gas utilities company  Gas Natural Fenosa.