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After selling its stake in KG gas block to Oil and Natural Gas Corporation (ONGC) for $1.2 billion, Gujarat State Petroleum Corp (GSPC) is mulling a big financial restructuring including trimming stake in some business like LNG and portfolio readjustment, its managing director J.N. Singh said.
The Gujarat government firm, which is saddled with nearly Rs20,000 crore of debt, has a large gas trading business, gas transmission pipelines and city gas business. “We are going through our entire financial restructuring exercise... Options are some dilution of the stake, some dilution of the equity (in some businesses),” Singh told PTI in an interview.
Refusing to elaborate, he said, various options of “financial reconstruction of the company and portfolio readjustments” are being looked at. “It will take some time (to take it to board). We are in the process. We have set up an internal subcommittee of the board looking at this. Prior to next financial year (it should be before the board),” he said.
GSPC has already offered to IOC its entire 50% stake in Rs4,500-crore LNG import terminal being set up at Mundra in Gujarat in partnership with Adani Group.
The 5 million tonne a year import terminal is 90% complete. Asked if divesting stake in other ventures is an option, he said, “That is one of the things we are considering.” Gujarat State Petroleum Corp (GSPC), which had between 2006 and 2010 acquired 11 oil and gas blocks in Egypt, Australia, Indonesia and Yemen, has surrendered 10 of these overseas assets and written off Rs2,000 crore investment.
Within the country, GSPC has working interest in 23 blocks, out of which 16 blocks are producing and balance 7 are under exploration/development stage. It is looking to divest some of these as well. Asked if this is the end of GSPC’s overseas foray in exploration and production (E&P business, Singh said, “It is such a business where you cannot say we are ending it now. We will keep on looking for good... but may be we will like to be may conservative than what we have been (in past).”
He said proceeds from sale of its 80% stake in KG-OSN-2001/3 or Deendayal block in KG basin, to Oil and Natural Gas Corp (ONGC) will be used to cut debt. During FY16 , GSPC reported a total operating income of Rs10,724 crore (FY15: Rs11,035 crore) and a net loss of Rs804 crore (FY15: PAT of Rs24 crore).
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