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National Gas sells its India investment for $15.6mn

14 Sep 2022 By GULAM ALI KHAN

Muscat – National Gas Company, the pioneer in liquefied petroleum gas (LPG) marketing in Oman and the region, announced that it has fully completed the divestment of its entire 60 per cent stake in the Indian project.

Earlier this year, the board of directors of National Gas had resolved to dispose the company’s investment in subsidiary NGC Energy India Pvt Ltd and classified the investment as assets held for sale.

‘Total sales proceeds of this transaction is US$15.61mn, which includes a premium of US$3.5mn. The profits resulting out of the transaction as disclosed would be accounted for the current quarter,’ National Gas said in a disclosure submitted to the Muscat Stock Exchange on Wednesday.

The company intends to use the proceeds from this divestment to bring down its loan exposures, consolidate and strengthen its balance sheet for future expansion and growth purposes.

‘We thank the acquirer of our shares Petregaz India Holdings for a smooth takeover and support for the closure of the transaction in a prompt way,’ National Gas added in the disclosure.

In March, National Gas had informed its shareholders that due to the pandemic effects and substantial escalation in the steel prices and construction costs, it is envisaged that the India LPG terminal project cost could escalate. ‘In shareholders’ interest, the company has been in negotiations for the divestment of its entire 60 per cent share in India project,’ Nationa Gas had said in March.

National Gas had formed its India subsidiary, NGC Energy India Pvt Ltd, in 2018 for setting up a refrigerated LPG storage and import terminal at Krishnapatnam port in the Indian state of Andhra Pradesh. In November 2019, the company onboarded Petredec India Holdings Pte Ltd (Singapore) as a joint venture partner by issuing additional equity shares to make them 40 per cent partner in NGC Energy India Pvt Ltd.

In August 2022, National Gas also decided to exit from its UAE operations, mainly due to continuous reduction in margins in the UAE market. ‘Considering the non-availability of LPG supplies from Oman for exports and the oversupply of gas in the UAE market, causing the continuous reduction in margins, the company has decided to exit its operations in the UAE region,’ National Gas said in a disclosure submitted to the Muscat Stock Exchange on August 15.

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