ADB denies plan to sell Petronet stake, rejects ‘internal clause’

Asian Development Bank said today that it has no plans to sell its 5.2 per cent stake in Petronet LNG Ltd...

Asian Development Bank (ADB) said today that it has no plans to sell its 5.2 per cent stake in Petronet LNG Ltd for which suitors like steel czar Lakshmi N Mittal and Chevron Corp of the US have lined up. “There is no internal regulation that prohibits ADB from being a debt financier as well as equity holder in the same company,” ADB said in a statement.

Petronet LNG CEO and MD Prosad Dasgupta had stated on February 26 that ADB is likely to exit the company by the year-end as its internal regulations prohibit it from being a lender and an equity holder in the same firm. “ADB has not yet decided to sell Petronet shares,” the multilateral lending agency said. “When and if ADB decides to do so, appropriate sales procedure will be followed.”

Dasgupta had stated that ADB was likely to sell its shares in Petronet LNG after it, along with German development bank KfW, had approved a $169-million loan to Petronet LNG for its expansion projects at Dahej and new terminal at Kochi. The so-called internal regulations were cited by Dasgupta to also initiate a dialogue with Mittal for getting the owner of the world’s largest steel manufacturing company into Petronet LNG. Dasgupta’s comments on ADB’s exit had prompted its promoters to stake claim to the shares of the multilateral lending agency by virtue of their first right of refusal.

First, GAIL India chairman and managing director U D Choubey had expressed interest in buying ADB’s entire 5.2 per cent stake and then Indian Oil Corporation (IOC) chairman Sarthak Behuria too laid claim. But since acquisition of even a single share by the public sector promoter firms would turn Petronet LNG into a state-run company, Behuria suggested selling the ADB stake to the public.

GAIL, IOC, ONGC and BPCL hold 12.5 per cent stake each in Petronet LNG. They along with French energy firm Gaz de France, which holds 10 per cent in the country’s largest LNG importer, hold first right of refusal over the ADB stake.