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Total to buy 37.4% stake in Adani Gas for Rs 5.7K crore

Adani Family and Total shareholders will ultimately hold 37.4 per cent each and public shareholders will hold remaining 25.2 per cent. Adani family will sell some stake in the open market to meet the listing norm of keeping public holding at 25 per cent.

Adani said both partners would make significant investments in the next 10 years.

French energy major Total SA has proposed to acquire a 37.4 per cent stake in Adani Gas Ltd — the firm that retails gas to automobiles and households — for an estimated Rs 5,700 crore.

Total will first make an open offer to buy a 25.2 per cent stake in Adani Gas. Depending upon the success in the open offer, it will buy a stake from Adani to take its holding to 37.4 per cent in the company. Adani family holds 74.8 per cent stake in Adani Gas and will dilute shares to the public to bring down its holding to 37.4 per cent, the two firms said in separate statements.

Adani Family and Total shareholders will ultimately hold 37.4 per cent each and public shareholders will hold remaining 25.2 per cent. Adani family will sell some stake in the open market to meet the listing norm of keeping public holding at 25 per cent.

Explained: What is Total SA, the French first buying stock in Adani Gas

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Adani Gas is targeting to set up 1,500 CNG stations to retail gas to automobiles and piped cooking gas to 6 million households. It will also set up 1,500 petrol pumps over 10 years. “Taking into account the divestiture of the Group’s interest in Hazira terminal in early 2019, the establishment of this partnership on gas in India represents a net acquisition cost for Total of approx $ 600 million over 2019-20,” Total said.

“The partnership will derive significant synergies between Adani’s capabilities of developing world class assets and Total’s global best practices as well as leveraging business synergies across LNG, Fuel Retail and City Gas Distribution,” Adani Group chairman Gautam Adani said in a statement.

Adani said both partners would make significant investments in the next 10 years across the businesses to develop India’s gas infrastructure, distribution, marketing businesses with presence in over 15 states reaching out to 7.5 per cent of the country’s population and setting up global scale and world class LNG, gas distribution and fuel retail infrastructure in India.

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Total, which exited a JV with Royal Dutch Shell in a 5 million tonne liquefied natural gas (LNG) import terminal at Hazira in Gujarat in August 2018, had in October last formed a 50:50 JV for two LNG import terminals of Adani on the east and west coast of India as well as for setting up of 1,500 petrol pumps in the country over 10 years.

The French firm is the latest energy major seeking to expand its presence in India, which is the world’s third-largest and the fastest-growing energy consumer. In August, Reliance Industries said Saudi Arabian Oil Co will buy 20 per cent of its oil-to-chemical business at an enterprise value of $ 75 billion. As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh.

“The natural gas market in India … is an attractive outlet for the world’s second-largest LNG player that Total has become,” said Patrick Pouyanné, chairman-CEO, Total. India has set the ambitious target of increasing the share of natural gas in its energy mix to 15 per cent by 2030.

First published on: 15-10-2019 at 01:26 IST
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