New Delhi (IANS) The government has said that adequate interest has been received for the strategic disinvestment of public sector refiner Bharat Petroleum Corporation Ltd (BPCL) with several suitors submitting expressions of interest (EoI).
The transaction will move to the second stage after scrutiny by the transaction adviser, said a tweet from the Twitter handle of the Secretary of the Department of Investment and Public Asset Management (DIPAM).
"For the strategic disinvestment of BPCL, multiple expressions of interest have been received by the transaction advisor. The transaction will move to the second stage after scrutiny by the TA," it said.
With this, there is no need to either defer the current strategic sale process or look for alternatives, as after the scrutiny of the eligibility of the bidders, the process would reach the price bid stage and finally the winning bidder would be decided, government officials involved in the process said.
Sources said that though multiple bids have been received, major energy giants including Reliance Industries, Saudi Aramco, UAE's Adnoc and UK's BP have not placed interest for the state-run oil major. This may lower competition and may impact valuations. The government also does not want to sell its prized oil entity at lower valuations.
The current bids for BPCL have barred the participation of public sector undertakings and as per a cabinet decision, only private entities could participate. Earlier, public sector undertakings such as the Indian Oil Corporation (IOC) had indicated their interest in BPCL if they were allowed to participate in the bidding. This option can now be considered only if the current disinvest process ends without a proper result and as a contingency plan, the government decides to look at alternate mechanisms to get a suitor for BPCL.
For the government, BPCL's disinvestment is important to achieve its high disinvestment target of Rs 2.1 lakh crore for the current fiscal. So far this fiscal, the government has garnered just over Rs 5,000 crore in disinvestment receipts. The government is selling its entire 53.29 per cent stake in BPCL to a strategic investor to mobilise over Rs 50,000 crore as disinvestment receipt.
BPCL operates four refineries in Mumbai, Kochi, Bina (Madhya Pradesh) and Numaligarh (Assam), but the facility in Assam is being hived off. The company accounts for 15 per cent of India's refining capacity of close to 250 million tonnes. The public sector company also owns 15,177 petrol pumps, 6,011 LPG (liquefied petroleum gas) distributorships and 51 LPG bottling plants. BPCL distributes 21 per cent of petroleum products consumed in the country and owns a fifth of the 250 aviation fuel stations in the country.
Despite being a good takeover target, the company sale plan had to be postponed on four occasions since March. The concern now is that the pandemic does not result in distress sale of this valuable government asset