HPCL to buy 50% stake in Shapoorji LNG terminal
OIL & GAS

HPCL to buy 50% stake in Shapoorji LNG terminal

Hindustan Petroleum Corporation Ltd (HPCL) has entered into a Share Purchase Agreement (SPA) for the acquisition of 50% shares of the paid-up equity share capital of HPCL Shapoorji Energy Private Limited (HSEPL)—an HPCL-Shapoorji joint venture, as the financially stressed Shapoorji Pallonji Group pursues asset monetisation plans to pare debt.

The undisclosed all-cash deal, signed on March 27, was done on mutually agreed pre-money enterprise valuation, HPCL said in a regulatory filing.

The acquisition will make HSEPL a wholly-owned unit of HPCL. HSEPL is developing a 5 million tonne per annum (mmtpa) LNG terminal (with provision for expansion to 10 mmtpa) at Chhara in Gujarat's Gir-Somnath district, at an estimated cost of Rs 5,408.82 crore.

The LNG terminal is located within the greenfield Chhara port's boundary being developed by Simar Port Private Limited, a wholly-owned subsidiary of SP Ports.

SP Ports is a 100% owned subsidiary of Shapoorji Pallonji Limited (SP Infra), which, in turn, is a wholly-owned unit of Shapoorji Pallonji And Company Pvt Ltd, the flagship company of the Shapoorji Pallonji Group (SP Group).

The terminal will be operated on a tolling model under which, off-takers will book capacity in the terminal on take or pay basis, source the LNG, re-gasify it at the facility, pay regasification charges, and sell the RLNG to end consumers through a high-pressure gas grid. HSEPL has received all the regulatory approvals for the commencement of construction activities for the project.

Financial stress had led the Shapoorji Pallonji Group to push back the completion of the new port at Chhara by three years to December 2023.

In November last year, the Expert Appraisal Committee (EAC) in the Ministry of Environment, Forest and Climate Change had endorsed an application filed by Simar Port Pvt Ltd seeking extension of the environmental and CRZ clearance granted by the Ministry by three years till January 2024.

Simar Port Pvt Ltd is building the port at Chhara with a capacity to handle 40 million tonnes (mt) of bulk cargo, 2 million twenty-foot equivalent units of containers, 20 mt of LNG and 10 mt of petroleum products under a concession agreement signed with the Gujarat Maritime Board.

Seeking extension of environment clearance, Simar Port, in its application to the Expert Appraisal Committee, said that Shapoorji Pallonji Group's revenues are severely impacted due to the ongoing pandemic of Covid-19. This has put short-term strain on SP Group for funding the project and has resulted in delays in equity infusion in the project, which has affected land acquisition and construction activities.

Image Source


Also read: Shapoorji Pallonji may sell stake in three companies

Also read: Oil PSUs plan asset monetisation through InvITs

Hindustan Petroleum Corporation Ltd (HPCL) has entered into a Share Purchase Agreement (SPA) for the acquisition of 50% shares of the paid-up equity share capital of HPCL Shapoorji Energy Private Limited (HSEPL)—an HPCL-Shapoorji joint venture, as the financially stressed Shapoorji Pallonji Group pursues asset monetisation plans to pare debt. The undisclosed all-cash deal, signed on March 27, was done on mutually agreed pre-money enterprise valuation, HPCL said in a regulatory filing. The acquisition will make HSEPL a wholly-owned unit of HPCL. HSEPL is developing a 5 million tonne per annum (mmtpa) LNG terminal (with provision for expansion to 10 mmtpa) at Chhara in Gujarat's Gir-Somnath district, at an estimated cost of Rs 5,408.82 crore. The LNG terminal is located within the greenfield Chhara port's boundary being developed by Simar Port Private Limited, a wholly-owned subsidiary of SP Ports. SP Ports is a 100% owned subsidiary of Shapoorji Pallonji Limited (SP Infra), which, in turn, is a wholly-owned unit of Shapoorji Pallonji And Company Pvt Ltd, the flagship company of the Shapoorji Pallonji Group (SP Group). The terminal will be operated on a tolling model under which, off-takers will book capacity in the terminal on take or pay basis, source the LNG, re-gasify it at the facility, pay regasification charges, and sell the RLNG to end consumers through a high-pressure gas grid. HSEPL has received all the regulatory approvals for the commencement of construction activities for the project. Financial stress had led the Shapoorji Pallonji Group to push back the completion of the new port at Chhara by three years to December 2023. In November last year, the Expert Appraisal Committee (EAC) in the Ministry of Environment, Forest and Climate Change had endorsed an application filed by Simar Port Pvt Ltd seeking extension of the environmental and CRZ clearance granted by the Ministry by three years till January 2024. Simar Port Pvt Ltd is building the port at Chhara with a capacity to handle 40 million tonnes (mt) of bulk cargo, 2 million twenty-foot equivalent units of containers, 20 mt of LNG and 10 mt of petroleum products under a concession agreement signed with the Gujarat Maritime Board. Seeking extension of environment clearance, Simar Port, in its application to the Expert Appraisal Committee, said that Shapoorji Pallonji Group's revenues are severely impacted due to the ongoing pandemic of Covid-19. This has put short-term strain on SP Group for funding the project and has resulted in delays in equity infusion in the project, which has affected land acquisition and construction activities. Image Source Also read: Shapoorji Pallonji may sell stake in three companies Also read: Oil PSUs plan asset monetisation through InvITs

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