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GSPC in talks with Singapore's GIC for raising funds

Press Trust Of India  |  Mumbai/ Ahmedabad 

State-run Gujarat State Petroleum Corp (GSPC) is in talks with Singapore's sovereign wealth fund, GIC, for raising funds, a top company official said. "After getting the Gujarat government's approval to raise Rs 2,000-2,500 crore through private placement of equity, talks are now under way with GIC, the world's leading sovereign wealth fund," said the official.

He, however, did not divulge the details. A delegation from GIC, led by its managing directors, Kunna Chinniah and Chua Lee Ming, visited Gujarat last month and met chief minister Narendra Modi to explore the possibility of investing in GSPC, a top finance department official said.

"Whether the fund raising for the state PSU will be through equity dilution or some other route is still not clear, as talks between GSPC and GIC are still underway and a final decision has not been taken yet," he said.

The Gujarat government now holds 91.35 per cent equity stake in the company. Government of Singapore Investment Corporation (GIC) is one of the world's leading sovereign wealth fund, established by the Singapore government. SBI Capital Markets Ltd and nine other had acquired 5 per cent equity stake in GSPC for a cash infusion of over Rs 1,000 crore in December, 2009. Deen Dayal West (DDW) field, in Krishna Godavari (KG) basin, on coast of Andhra Pradesh, is amongst the major assets of the company having production area covering around 17 km. On conservative estimates, the Director ate General of Hydrocarbon (DGH) has certified 2 trillion cubic feet (tcf) of gas in GSPC's Deen Dayal block in KG basin. According to GSPC estimates, for the field development plant (FDP) of DDW, around USD 1,801.04 million (Rs 8,464.80 crore) shall be required. Of this, USD 1,270 million (Rs 5,971.80 crore) shall be the fund requirement by financial year 2013, to start commercial production. The cost of developing DDW has escalated further with an appreciating dollar. GSPC, had last year tied up for Rs 3,000 crore term-loan through a consortium of 15 banks, led by Bank of Baroda, to finance its Deen Dayal field.

GSPC was to come out with an IPO in June last year, to raise over Rs 3,000 crore but it dit not materialise.

First Published: Wed, November 23 2011. 00:49 IST