BG Group sells of 65.12% stake in Gujarat Gas to GSPC

London-based BG Group today announced that it has completed the sale of its 65.12 percent stake in India's largest private natural gas distributor Gujarat Gas Co Ltd (GGCL) for about Rs 2,460 crore to GSPC.

A binding agreement for the sale of the interest to a subsidiary of Gujarat State Petroleum Corporation (GSPC) was announced in October 2012.

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"The transaction was completed after BG Group and GSPC received the necessary approvals from the Reserve Bank of India and the Competition Commission of India," the company said in a statement.

BG Group said sale of its interest in GGCL was part of a broader rationalisation programme, aimed at refocusing the Group's portfolio on its core strengths of exploration and production and liquefied natural gas.

Originally, a consortia of GSPC, state-owned Oil and Natural Gas Corp (ONGC) and Bharat Petroleum Corp Ltd (BPCL) was to buy 65.12 percent stake GGCL. BG Group too had shortlisted GSPC-ONGC-BPCL as a consortia for the stake sale.

Later, state-owned Oil India Ltd (OIL) too joined the consortia but when it came to making a final price bid GSPC quoted Rs 2,463.8 crore on its own in October last year.

The PSUs withdrew from the consortium at the last minute apparently because the Oil Ministry under the then minister S Jaipal Reddy was wary of giving BJP-leader and Gujarat Chief Minister Narendra Modi any kind of advantage on the eve of elections in the state, sources said.

The ministry was upset about Modi claiming credit for gas pipelines that GSPC is to lay with oil PSUs from the east coast to the west and then up to Jammu. It felt majority of the money was being put in by oil PSUs but it was Modi who was getting all the credit, they said.

ONGC and BPCL had after the October 3 announcement of GSPC buying GGCL stated that they did not have time to complete all the formalities for putting the bid.