The Foreign Investment Promotion Board has recommended that Caltex Gas India be exempted from divesting its 26 per cent stake to Indian residents.
The FIPB has now sent the recommendation to Finance Minister P Chidambaram.
While the FIPB is of the opinion that such an exemption has been granted to other companies in the past, a waiver of the compulsory divestment condition has not been granted for Coca-Cola, Shell India and Sodexho. Over 20 companies have had to comply with this divestment criterion.
Divestment Development: Complete Coverage
In 2002, the government had permitted US-based Caltex to acquire a 49 per cent stake held by Indian shareholders in the company's Indian joint venture for a consideration of Rs 175 crore (Rs 1.75 billion).
The clearance was subject to the condition that the American company offers a minimum of 26 per cent equity to Indian shareholders within five years from the date of approval.
The company approached the FIPB, which proposed a waiver for Caltex after the petroleum ministry, the department of economic affairs and the commerce and industry ministry agreed to the proposal.
Caltex Gas India is engaged in importing, storing, bottling and marketing of liquefied petroleum gas in southern India.
The company's LPG bottling plants are located at Chennai and Madurai. Its import terminal is located at Tuticorin.
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