Gujarat Gas board approves merger/ demerger with GSPL and GSPC

Gujarat State Petronet Limited (GSPL) has approved a landmark restructuring plan that will see the consolidation of three major entities within the energy sector-Gujarat State Petroleum Corporation (GSPC), GSPL, and GSPC Energy Limited (GEL)-into Gujarat Gas Limited (GGL).

This strategic move, announced after a board meeting, represents a significant shift in the landscape of the energy industry in Gujarat and is expected to bring about substantial benefits in terms of business synergy, operational efficiency, and the simplification of the holding structure.

The board of directors of all the involved companies gave their nod to what is being called 'The Scheme of Arrangement' during their respective board meetings held on August 30, 2024. The merger is designed to streamline the complex holding structure currently in place, where GSPC holds a 37.6 percent stake in GSPL, and GSPL owns a 54.2 percent stake in Gujarat Gas. By consolidating these stakes under a single entity, the merger aims to create a more cohesive and efficient corporate structure.

The specifics of the merger have been outlined in terms of share exchange ratios, which are critical for the shareholders of the involved companies. According to the approved plan, GSPC shareholders will receive 10 shares of Gujarat Gas for every 305 shares they currently hold in GSPC. On the other hand, GSPL shareholders will be entitled to 10 shares of Gujarat Gas for every 13 shares held in GSPL. These ratios have been carefully calculated to ensure that the merger is fair and equitable for all stakeholders involved.

The merger is expected to have significant implications for the shareholders of all the merging entities. By combining the resources, assets, and operations of GSPC, GSPL, and GEL under the umbrella of Gujarat Gas, the company expects to achieve a considerable increase in operational scale and efficiency. This, in turn, could lead to enhanced profitability for the merged entity, which would directly benefit the shareholders.