New Delhi, Mar 11 (UNI) GAIL (India) Limited today said it will set up a subsidiary company for City Gas Distribution and CNG corridor business.
The initial equity in the subsidiary company will be Rs 200 crore while debt will be arranged amounting to Rs 300 crore.
The listing of the new company will be decided in due course of time and the pricing policy will be based on the consumer potential, Dr U D Choubey, CMD, GAIL said on the sidelines of the conference.
The company has raised its authorised capital of Rs 20 billion and decided to mull over bonus issue in two-three months.
''The subsidiary company will take up distribution and marketing of CNG as fuel for vehicles (inter city as well as intra city), piped natural gas for domestic, commercial and industrial purposes and Auto LPG as fuel for transport vehicles in the various cities of India and abroad,'' said Dr Choubey.
''The subsidiary company will also take up investment in and setting up of infrastructure, in the various cities of India and along the national highways for building CNG corridors,'' he said.
This includes natural gas compressor stations, laying of the pipelines from City Gate Station(s) to the consumption areas and associated facilities, setting up of distribution points and retail outlets for CNG and Auto LPG and transport gas through mobile cascades and lorries, he added.
The existing joint venture companies will continue to operate as at present. However, the company will have the option to transfer its shares in the existing City Gas Distribution Joint Venture Companies as also the assets in Agra - Ferozabad Local Distribution Network to the subsidiary company.
CMD, GAIL will be the ex-officio Chairman of the subsidiary company. Its Board of Directors will consist of not less than four and not more than 12 Directors. The Board will initially comprise of five Directors including the Managing Director, to be appointed by GAIL.
The new subsidiary will also take up the CNG Corridor Project which involves an estimated capital outlay of Rs 35 crores for setting up CNG stations along the highways.
The company has identified 230 cities contiguous to existing and proposed pipelines for CGD in phased manner. In first phase, 17 cities have been identified to be taken up through its subsidiary company with authorisation from Petroleum and Natural Gas Regulatory Board (PNGRB).
Asked whether the company will enter into collaboration with foreign players, the CMD said, ''We are keeping all options open.'' UNI AK SG RN1636