INTERVIEW: GSPC Gas head says co to rope in IFC as equity partner
Tuesday, Sep 23
NEW DELHI - GSPC Gas Co. Ltd., the city gas distribution arm of
Gujarat
State Petroleum Corp. Ltd., plans to rope in International Finance
Corp. as an
equity partner in the company, Chief Executive Officer P.P.G. Sarma
told
NewsWire18.
The company plans to use the funds raised on expansion of
operations.
"The quantum of equity stake to be offered to IFC is being worked
out and
will be finalised once we get Gujarat government's approval," Sarma
said in an
interview.
He, however, did not specify whether the private equity arm of
World Bank
will be inducted by dilution of stake by existing shareholders or by
expanding
the company's equity base.
"All options are being considered, and hopefully the process will
be
completed before March," Sarma said.
IFC already also holds 3.33% stake in Gujarat State Petronet Ltd.,
the
listed subsidiary of GSPC.
Gujarat government currently holds 98.5% in GSPC Gas through GSPC
(around
62%) and GSPL (36.5%). The remaining 1.5% stake is held by seven large
gas
consuming power and fertiliser companies in Gujarat.
He said there was a "strategic" reason behind inducting IFC as an
equity
partner--as it will add credence to the company and will facilitate
future
fund raising plans.
.
EYEING EXPANSION
Sarma said GSPC Gas plans to expand its compressed natural gas
stations to
70 from current 20 by the end of the current financial year in March,
he said.
It plans to add 30 CNG stations by end December and another 20 by
March.
In the second phase of expansion, GSPC Gas plans to cover most
districts
of Gujarat, and set up more than 100 CNG stations in the state.
The company is also expanding its steel pipeline network by 100 km
from
119 km as on Mar 31, 2008, and increase polyethylene pipelines to
around 1,400
km from 1,177 km to reach out to new areas.
"Each new CNG stations entails an investment of around 30 mln
rupees,"
Sarma said.
GSPC Gas currently operates in 12 areas in Gujarat--Kalol,
Gandhinagar,
Chandkheda, Nadiyad, Anand, Hazira, Navsari, Valsad, Vapi, Morbi,
Rajkot and
Bamanbor.
.
CAPEX PLAN
GSPC Gas has lined up capital expenditure of 2.6 bln rupees by Mar
31 to
expand its operations in Gujarat. The capex plan will be funded via a
mix of
internal accrual and debt, Sarma said.
"As per our original business plan, we had estimated a capital
expenditure
of 6.2 bln rupees, of which we have already spent 3.6 bln rupees," he
said.
He said the company is looking at raising debt from India as well
as
overseas, including external commercial borrowings and long-term loans
from
IFC.
Sarma said the company may also consider raising money from the
capital
market in the next financial year to fund its second phase of
expansion.
.
SOARING REVENUES
Sarma said the company aims for revenues over 1 bln rupees by the
end of
the current financial year.
"Our revenues are growing 850 mln rupees every month, and by end
of
2008-09, we will have 1.02-bln-rupee revenues, which is a significant
milestone as we have been operational only for a couple of years," he
said.
GSPC Gas was set up two years ago to operate gas distribution
networks in
towns and cities across Gujarat to meet demand from industrial,
domestic,
commercial and transport sectors.
He said the company hoped to reach out to six other operational
areas,
including Khambhat, Surendranagar, Bharuch, Kalol and Dahej by March.
"In some of these new areas, we are fairly at an advanced stage,
and can
be operational very soon," Sarma said. End
--~--~---------~--~----~------------~-------~--~----~
You received this message because you are subscribed to the Google Groups
"Kences1" group.
To post to this group, send email to [email protected]
To unsubscribe from this group, send email to [EMAIL PROTECTED]
For more options, visit this group at
http://groups.google.com/group/kences1?hl=en
-~----------~----~----~----~------~----~------~--~---
