Gujarat Gas board approves merger, demerger plan involving GSPC and GSPL

Gujarat Gas shares have tanked over 10 percent in the past month.

The board of Gujarat Gas Limited (GGL) approved a scheme of arrangement and amalgamation on August 30, involving Gujarat State Petroleum Corporation Limited (GSPC), GSPC Energy Limited, and Gujarat State Petronet Limited (GSPL) merging into GGL. The arrangement outlines the integration of GSPC, GSPL, and GEL with GGL.

Additionally, the scheme involves the demerger of GGL's Gas Transmission Business, which will be carved out and listed separately as GSPL Transmission Limited (GTL) on stock exchanges. The proposal specifies the shareholding arrangements for the existing shareholders of GSPL and GSPC.

Read: Dalal Street Week Ahead: Manufacturing, services PMI, US economic data among 10 key factors to watch

According to GGL’s exchange filing, the merger aims to foster business synergies and growth, simplify the GSPC Group Holding Structure, unlock shareholder value, enhance operational efficiency, expand business scale, and ensure optimal resource utilization.

GSPC is primarily involved in natural gas trading and exploration and production activities, while GSPL operates in the natural gas transmission sector through its pipeline network. GGL focuses on city gas distribution and managing the delivery of gas from supply points to end-users.

Read more: Bajaj Housing Finance IPO to open between September 9-11; to raise Rs 6,560 crore

The scheme is subject to regulatory approvals, including those from the Ministry of Corporate Affairs, National Stock Exchange of India, BSE, SEBI, shareholders, and creditors. On August 30, shares of GGL closed at Rs 605.50, up 0.36 percent.

Shareholding arrangements under the scheme include the issuance of 10 equity shares of Rs 2 each in GGL for every 305 equity shares of Rs 1 each held in GSPC. Similarly, GSPL shareholders will receive 10 equity shares of Rs 2 each in GGL for every 13 equity shares of Rs 10 held in GSPL. GSPL shares ended at Rs 442.35, gaining 5.50 percent on the same day.

Regarding the new transmission entity, GGL shareholders will receive 1 equity share of Rs 10 each in GSPL Transmission Limited (GTL) for every 3 equity shares of Rs 2 held in GGL.

Gujarat Gas shares have tanked over 10 percent in the past month.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.