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Adani Gas shares hit by report of PNGRB notice on non-disclosure

Company says all concerned authorities were intimated about reorganisation exercise.

ET Bureau|
Last Updated: Jan 25, 2020, 09.06 AM IST
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Agencies
Adani Gas-1200
Mumbai: Adani Gas plummeted over 14% intraday on Friday after media reports said that the Gautam Adani-led company is staring at a Rs 400-crore penalty and possible cancellation of its city gas distribution licences by the Petroleum and Natural Gas Regulatory Board (PNGRB). The gas regulator has issued a notice to the company on nondisclosure of information and other alleged violations while bidding for city gas distribution projects.

Adani Gas said the company has responded to PNGRB’s notice and that it is fully compliant. It said that all concerned authorities were intimated about the proceedings pertaining reorganisation of Adani Gas through media, newspapers, disclosures, public listing, and bid submissions.

“There is no question of penalties as same are not applicable and moreover Adani Gas is in full compliance of applicable rules/laws,” the company said. Shares of the company recovered a little after the initial plunge to end in the green at Rs 175.30 up 1.4%.

A television media report said that PNGRB issued a notice because Adani Gas had bid for gas projects using networth calculations of group company Adani Enterprises without disclosing the scheme of arrangement between the two. Adani Gas was the city gas distribution arm of Adani Enterprises but was later demerged and listed as a separate entity in November 2018. The report claimed that PNGRB saw this as a violation of law as Adani Gas’ shareholding changes and restructuring were not in compliance with CGD regulations.

“We have duly responded to PNGRB with all required information to close the matter. Our project work at all geographical areas (GA) is going on in full swing and with the facilitation and support of PNGRB and all authorities we are committed to deliver CNG and piped gas to millions of our consumers on fast track basis,” Adani gas said in a statement.

In October, Adani Gas announced that it had struck a pact under which French energy major Total SA would buy 37.5% stake in the company, including a public offer to shareholders to buy a further 25.2%.

Total said that the net acquisition cost would be $600 million over 2019-2020. Both partners would eventually hold 37.4% each and plan to invest in infrastructure and assets worth over $1 billion, which span LNG infrastructure and marketing and fuel retail business. The deal is yet to get PNGRB approval.

Adani Gas has six operational GAs and 13 under execution of its own. It also has another eight GA’s operational at Indian Oil Corporation joint venture and 11under execution.
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