Petronet to raise $100 mn through FCCBs

Petronet LNG Ltd, India's largest liquefied natural gas importer, will raise $100 million through issue of foreign currency convertible bonds in June-July, which would result in its promoters ONGC, GAIL IOC and BPCL shareholding falling by 7.5 per cent.

Oil and Natural Gas Corporation, GAIL, Indian Oil Corporation and Bharat Petroleum Corporation together hold 50 per cent stake in PLL, the company that imports 5 million tonnes of LNG at Dahej in Gujarat and is building another terminal in Kochi.

"The board of directors of the company at its meeting on Thursday accorded its approval for raising funds through issuance of Foreign Currency Convertible Bonds to the extent of $100 million to part finance the LNG terminal at Kochi," PLL managing director and CEO P Dasgupta said.

The bonds can be converted into equity shares of the company within 5-years of the issue. Bonds not converted into equity shares would be redeemed by the company with 4.5-5 per cent coupon rate.

Conversion of all the FCCBs into equity share would see promoters stakeholding fall by 7.5 per cent in the enlarged equity base.

"The promoters have an option to raise their stake to present levels of 50 per cent by acquiring 2.5 crore shares from the market," Dasgupta said.

Petronet would shortly appoint merchant bankers for the issue and float the bonds after company's AGM approves it on June 14.

Dasgupta did not say at what rate the bonds would be converted into equity, but analysts said the conversion strike rate varied between 35 to 60 per cent over the current market price.

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