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Govt hopeful BPCL strategic sale to sail through without further extensions
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SME Times News Bureau | 17 Oct, 2020
After four extensions, the
government is hopeful that strategic sale of Bharat Petroleum
Corporation Ltd. (BPCL) may go through without any further need to
postpone the bidding deadlines.
The deadline for submitting the
Expressions of Interest (EoI) for 52.98 per cent stake in the BPCL is
ending on November 16. Prior to this, the bid start date was September
30, but it got postponed due to bidders' request in wake of prevailing
situation arising out of Covid-19 pandemic.
BPCL disinvestment
has received interest from several large global oil and gas companies
and a few Indian entities as well. In fact, the process so far has
generated close to 100 enquiries in a clear signal that investors remain
interested in the maharatna oil PSUs despite the disruptions caused by
Covid-19 pandemic, official source privy to the development said.
According
to them, Abu Dhabi National Oil Co (Adnoc), Exxon Mobil intend to
participate in the bidding process for the PSU. Indian oil majors are
not behind their global counterparts and are also actively pursuing the
prospects of bidding for BPCL. Oil-to-telecom major Reliance Industries
is understood to have shown interest for the bid.
Reports,
however, suggest that world's largest oil producer Saudi Aramco and
Rosneft of Russia may not participate in the bid due to soft oil prices
and fragile demand conditions.
The deadline for submitting EoIs
has been postponed four times and the current deadline ends on November
16. We are confident that EoI will sail through within time with several
interested bidders coming into the fray, the sources quoted above said.
While
the queries about the sale is a reflection of interest that BPCL
disinvestment has, it does not always amount to investment. But the
queries relating to timing to complete the bids, net worth requirement,
what kind of controls investors may have to face, will they have to
operate in regulated regime or how the money would have to be brought
for the purchase, had given confidence that investors remain serious
about BPCL.
On its part, disinvestment department had issued
several clarifications to investors and eased several processes to make
the sale attractive.
The disinvestment in BPCL involves the
government selling its entire 52.98 per cent stake in the company to a
strategic investor with transfer of management control. The government
has barred PSUs from bidding for BPCL and expects private sector Indian
players and global MNCs to bid for its stake.
The Indian
government proposes to disinvest its entire shareholding in BPCL
comprising 1,14,91,83,592 equity shares held through the Ministry of
Petroleum and Natural Gas, which constitutes 52.98 per cent of BPCL's
equity share capital, along with the transfer of management control to
the strategic buyer (except BPCL's equity shareholding of 61.65 per cent
in Numaligarh Refinery Ltd. (NRL) and management control thereon).
The
shareholding of BPCL in NRL will be transferred to a Central Public
Sector Enterprise operating in the oil and gas sector under the Ministry
and accordingly, is not a part of the proposed transaction.
The government's stake in BPCL is worth around Rs 50,000 crore at BPCL's current share price.
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