JIn November last year, the government decided to sell its 52.98 per cent stake in Bharat Petroleum Corp Ltd (BPCL). It has sought expression of interest (EOI) from potential acquirers till 31 July
New Delhi: Oil Minister Dharmendra Pradhan said on Friday that in view of the fall in global energy prices, there is no going back on the decision to privatize BPCL, the country's largest oil marketing company. Speaking at the BNEF summit, he, however, said that the time for privatization would be decided by the Finance Ministry.
On a question, Is government reviewing the divestment of BPCL or not? And he said that his answer is very clear. The government is very firm on one issue.
In November last year, the government decided to sell its 52.98 per cent stake in Bharat Petroleum Corp Ltd (BPCL). It has sought expression of interest (EOI) from potential acquirers till 31 July.
Pradhan insisted, "We are firm on the decision we have taken on BPCL."
Related Article: Assam gas field must have broken the green guidelines
Stating that the last date for submission of EOI is now 31 July, he said that the actual selling time will depend on the market.
He also said that his partners were attending to Finance Minister Nirmala Sitharaman and DIPAM and they'll take applicable decisions in the view of the market scenario.
Bharat Petroleum Corporation Limited will provide buyers authorization 15.3 % of India's oil refining capacity and will also provide 22 % of total fuel market share.
BPCL has a market capitalization of about Rs 85,316 crore and the government's share at current prices is around Rs 45,200 crore. The successful bidder must also make an open offer to the other shareholders to receive the other 26 per cent at the same price.
Privatization of BPCL is necessary to meet the target of Rs 2.1 lakh crore set by disinvestment income in the budget of 2020-21.
Bharat Petroleum Corporation Limited runs four refineries which are in Kochi of Kerala, Bina of Madhya Pradesh, Mumbai of Maharashtra and Numaligarh of Assam with a joint capacity of around 38.3 MT per year, which is around 15.3 per cent of the total refining capacity of 249.8 MT of India.
Related Article: UAE oil major signs $ 20 billion gas deal
While the Numaligarh refinery will be rolled out of BPCL and sold to a PSU, the company's new buyer will get 35.3 million tonnes of refining capacity.
BPCL owns about 16,309 petrol pumps and 6,113 LPG (Liquefied Petroleum Gas) distributor agencies in the country. In addition, it has 51 LPG bottling plants.
The government has authorized Deloitte Touche Tohmatsu India LLP as its marketing consultant for the strategic disinvestment process.
The Government of India proposed a strategic divestment of its total shareholding in Bharat Petroleum Corporation Limited, consisting of 114.91 crore holdings shares, which includes around 52.98% of BPCL's total share capital, with the transfer of management control to a strategic buyer (BPCL's Excluding equity shareholding 61.65) in Numaligarh Refinery Limited), the proposal invited notice stated.
The bid will be of two stages, with qualified bidders in the first EOI phase to be asked to make financial bids in the second round.
Related Article: China wants to boost its oil and gas production in 2020
Public sector undertakings (PSUs) are not eligible to participate in "privatization", the proposal document said.
The total assets of any private company are USD 10 billion which are eligible to bid and the consortium of more than four firms will not be allowed to bid.
As per the bid criteria, the principal member of the consortium should hold a 40 per cent stake and the others should have a minimum net USD one billion.
It has been said that changes are made within the consortium within 45 days, but the lead member cannot be changed.
Related Article: Petroleum Minister: 12 new investment agreements worth $ 1B
0 Comments