New Delhi: GAIL (India) Limited's board of directors has approved a scheme to merge Konkan LNG Limited (KLL), its wholly-owned subsidiary, into the company, GAIL disclosed to the stock exchanges on Friday. On the scheme taking effect, KLL will be dissolved and its entire equity share capital cancelled.
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Because KLL is a wholly-owned subsidiary of GAIL, the merger is being routed through Section 233 of the Companies Act, the simplified, fast-track amalgamation provision available for a holding company and its wholly-owned subsidiary, which does not require National Company Law Tribunal (NCLT) approval.
On the mechanics, GAIL said in the filing: "On the Scheme becoming effective, KLL shall be dissolved without being wound up in accordance with Section 233 of the Companies Act, whereby all equity shares of KLL shall be cancelled after merger." There is no cash consideration or share exchange ratio, as KLL is wholly-owned by GAIL. The company said there would be "No change in shareholding of GAIL."
The merger comes three weeks after KLL became a wholly-owned subsidiary of GAIL. GAIL's shareholding in KLL rose to 100 percent on July 10, after MSEB Holding Company Limited's stake was extinguished under an NCLT-approved reduction of KLL's equity share capital. That step is what makes the Section 233 route available now, since the fast-track provision applies to a company and its wholly-owned subsidiary.
GAIL reported a turnover of Rs 1,41,483 crore for FY2025-26, against KLL's Rs 741 crore, the subsidiary's turnover is about half a percent of the parent's. KLL owns and operates the LNG regasification terminal at Dabhol, Ratnagiri, in Maharashtra. GAIL's business spans the marketing and transportation of natural gas, petrochemicals and liquid hydrocarbon.
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GAIL said the merger is intended "to create a larger and stronger vertically integrated entity, simplify and rationalise group structure which will enhance operational efficiencies." The filing recorded the transaction as a related-party transaction, KLL being a wholly-owned subsidiary.