GSPC, GEL, GSPL to merge into Gujarat Gas: Significant operational changes ahead

Gujarat Gas Limited's (GGL) board on August 30 approved a comprehensive scheme of arrangement and amalgamation that will significantly reshape the company’s operations. The plan involves the merger of Gujarat State Petroleum Corporation Limited (GSPC), GSPC Energy Limited (GEL), and Gujarat State Petronet Limited (GSPL) into GGL.

As part of this restructuring, GGL’s Gas Transmission Business will be demerged and listed separately as GSPL Transmission Limited (GTL) on stock exchanges. The scheme also outlines specific shareholding arrangements for current shareholders of GSPL and GSPC.

In an exchange filing, GGL stated that the merger is designed to promote business synergies, streamline the GSPC Group Holding Structure, unlock shareholder value, improve operational efficiency, expand the business scale, and ensure optimal use of resources.

GSPC is primarily engaged in natural gas trading, exploration, and production, while GSPL operates a natural gas transmission network. GGL focuses on city gas distribution, managing the delivery of gas from supply points to end-users.

The proposed scheme is subject to various regulatory approvals, including from the Ministry of Corporate Affairs, the National Stock Exchange of India, BSE, SEBI, shareholders, and creditors. On August 30, GGL’s shares closed at ₹605.50, marking a 0.36 per cent increase.

Under the new shareholding arrangements, GGL will issue 10 equity shares of ₹2 each for every 305 equity shares of ₹1 held in GSPC. GSPL shareholders will receive 10 equity shares of ₹2 each in GGL for every 13 equity shares of ₹10 held in GSPL. On the same day, GSPL’s shares rose by 5.50 per cent, closing at ₹442.35.

Regarding the new transmission entity, GGL shareholders will receive 1 equity share of ₹10 each in GSPL Transmission Limited (GTL) for every 3 equity shares of ₹2 held in GGL.

However, Gujarat Gas shares have seen a decline of over 10 per cent in the past month.