Engie Seeks $512 Million Selling Stake in India LNG Importer

  • Former French monopoly seeks to exit Petronet LNG investment
  • Shares offered at up to 5.2% discount to Wednesday close

Engie SA, France’s former natural-gas monopoly, is seeking to raise as much as 33 billion rupees ($512 million) selling its entire stake in India’s biggest importer of liquefied natural gas.

Engie’s GDF International unit is offering 75 million shares of Petronet LNG Ltd., equal to about a 10 percent stake, at 417 rupees to 440 rupees apiece, according to terms for the deal obtained by Bloomberg on Wednesday. The price range represents a 0 percent to 5.2 percent discount to Petronet’s last close.

The sale adds to at least $9.5 billion of divestments announced by Engie over the past three years, according to data compiled by Bloomberg. The French company in May entered exclusive talks to sell a 70 percent stake in its exploration and production unit to Neptune Energy, which is backed by private equity firms Carlyle Group LP and CVC Capital Partners. 

Engie is exiting the investment as Indian Prime Minister Narendra Modi pushes the use of cleaner fuels to improve the air quality in cities. Oil Minister Dharmendra Pradhan said last year the nation will lay 15,000 kilometers (9,300 miles) of gas pipelines over five years. India has been seeking to increase the share of natural gas in its energy mix to 15 percent by 2020, from 6.5 percent.

Shares of Petronet have risen 20 percent in Mumbai trading this year, outpacing the 17 percent gain in the benchmark S&P BSE Sensex Index. Engie, which invested in the company in 2001, hired Citigroup Inc. and JPMorgan Chase & Co. as joint placement agents for the offering, the terms show.

Engie flagged its plans to sell the stake in March and said it would first offer the shares to the four Indian state-owned petroleum companies that control Petronet. Oil & Natural Gas Corp., Bharat Petroleum Corp., Indian Oil Corp. and GAIL India Ltd. each own about 12.5 percent of the New Delhi-based LNG importer, data compiled by Bloomberg show.

Any transaction will help further Engie’s plans to sell 15 billion euros ($16.9 billion) of assets in the three years through 2018, curbing its exposure to fluctuating prices of oil, gas and power. It intends to reinvest the proceeds in energy services and infrastructure as well as renewables, which offer more predictable revenue streams through long-term contracts and regulated tariffs.

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