GAIL India ltd. decided to sell part of its 4.6 percent stake in China Gas Holdings which is Hong Kong-listed city gas distribution firm. GAIL had made a strategic investment of Rs 137 crore by acquiring 210 million shares of China Gas in 2005. The gas utility however plans to keep a small strategic interest in the company that will help it retain its board position in China Gas. GAIL has earned only Rs 16.29 crore as dividend on its investment in China Gas over seven years.
China Gas enjoys exclusive rights to set up gas distribution projects in 42 cities in China. China Gas has a 30 years exclusivity period for its city gas operations in 172 Chinese cities cities and it has a network of a 35000 kms long gas pipeline serving 7.8 million households and 49000 factories and business.