State-owned gas utility GAIL India on Friday announced that it had sold nearly a fourth of its 4.6 per cent stake in city gas distribution company China Gas Holdings for Rs. 385 crore.

The company had made an investment of Rs. 137 crore by acquiring 210 million shares of China Gas in 2005. It has now sold 60 million shares, GAIL India chairman and managing director B.C. Tripathi told reporters here.

The gas utility plans to keep a small strategic interest in the company that will help it retain its board position in China Gas Holdings. “Our gross realisation is Rs. 385 crore. The company has to pay taxes like capital gains on this realisation,” he added. China Gas has exclusive rights to set up gas distribution projects in 42 cities in China.

On the other hand, the company reported a 7 per cent drop in its September quarter profit after it made losses in the cooking gas (LPG) business. Net profit in July-September dropped to Rs. 915.67 crore as compared to Rs. 985.38 crore a year ago. “Major reason for decline in profit after tax is the Rs. 377 crore loss suffered on LPG,” Mr. Tripathi said.

While price realised on sale of LPG was 19 per cent higher at Rs. 50,000 per tonne, the segment suffered loss as the company had to shell out Rs. 700 crore to in fuel subsidies. GAIL had to use imported gas (LNG) for manufacturing cooking gas after supplies from Reliance Industries Limited’s KG-D6 fields dried-up.

Mr. Tripathi said the profits were impacted because of drop in gas that GAIL transported during the quarter to 95 million standard cubic meters per day from 106 mmscmd. “This was primarily because of lower supplies of gas from KG-D6 and less production from Panna-Mukta and Tapti fields,” he said.

He said GAIL imported 11 shiploads or cargos of liquefied natural gas (LNG) in the first half of current fiscal and will import 19 cargos in during the remainder period of the 2013-14 fiscal. It will resume import of LNG at the Dabhol terminal in Maharashtra next month, he said, adding that shipments had stopped during monsoon period as the port does not have a breakwater to guard ships against rough sea.

More In: Industry | Business