New Delhi: As part of the largest privatization initiative in the country, the government on Saturday invited bids to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Limited (BPCL), the second largest oil refinery company.
According to the bid document of the Department of Investment and Public Asset Management (DIPAM), interest letters can be submitted by May 2 for the strategic sale of BPCL. It states, “The Government of India is proposing a strategic disinvestment of its entire shareholding in BPCL. It comprises 114.91 crore equity shares which is 52.98 per cent of BPCL’s total equity capital. Along with this, the management control of the company will also be handed over to the strategic buyer. “
BPCL’s 61.65 percent stake in Numaligarh Refinery Limited (NRL) is not included in this disinvestment proposal. This stake of NRL will be sold to a public sector oil and gas company. Bidding will be done in two stages. The successful bidder who showed interest in buying the company in the first phase will be asked to make a financial bid in the second phase.
The document issued for the bid invitation states that public sector companies “are not eligible to participate in privatization.” Any private company with a net worth of US $ 10 billion can participate in the strategic disinvestment of the company and a maximum of four companies will be allowed to bid.
According to the terms of the bid, the leading member of such group would have to take at least 40 percent stake while the other members should have a minimum net worth of one billion dollars. It states that any change made to the members of a group that makes a bid must be made within 45 days, but the leading member cannot change. BPCL has 14 percent share of the country’s oil refinery capacity and about a quarter of its share in the fuel market. BPCL has a market capitalization of about Rs 87,388 crore and the government’s share at the current market price is around Rs 46,000 crore. The successful bidder will have to make an open offer to acquire a 26 percent stake from other shareholders at the same price.
