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BPCL privatization likely to be completed by March 2022

The government, which holds a 52.98% stake in BPCL, is in the process of divesting its holdings, as part of its plan to raise a record  ₹1.75 trillion from disinvestment proceeds in FY22. ( Ramesh Pathania/Mint)Premium
The government, which holds a 52.98% stake in BPCL, is in the process of divesting its holdings, as part of its plan to raise a record 1.75 trillion from disinvestment proceeds in FY22. ( Ramesh Pathania/Mint)

  • If things go as planned, key processes can be completed by July and the interested companies can submit the financial bids by August, and if the sale and purchase agreement is signed by September, the deal could take another five-six months to complete, said N. Vijayagopal, director, finance, BPCL

MUMBAI : State-run Bharat Petroleum Corp. Ltd (BPCL) is looking to complete its privatization process this financial year, if all goes well and covid-19 pandemic does not push the process back, said a top company official.

The government, which holds a 52.98% stake in BPCL, is in the process of divesting its holdings, as part of its plan to raise a record 1.75 trillion from disinvestment proceeds in FY22.

On 10 April, the government had given access to BPCL’s data to prospective bidders.

So far, mining-to-oil conglomerate Vedanta and private equity firms Apollo Global and I Squared Capital’s arm Think Gas are in the race to buy the government’s stake in BPCL.

“There were a few questions which we are in the process of addressing. And then there are a few questions that only the government of India can answer," said N. Vijayagopal, director, finance, BPCL, after the March quarter earnings call.

He said the final bidders will have to visit BPCL’s facilities, which is not possible now due to restrictions on international travel in view of the second wave of the covid-19 infections in India.

“If things go as planned, these processes can be completed by July and the interested companies can submit the financial bids by August. If the sale and purchase agreement (SPA) is signed by September, we could take another five-six months to complete the deal," said Vijayagopal, adding that this is his personal view and not of the government.

As part of the privatization process, BPCL sold its 61.65% stake in Assam-based Numaligarh Refinery Ltd (NRL) for 9,875 crore to a consortium of Oil India Ltd (OIL) and Engineers India Ltd (EIL) (49%) and the remaining 13.65% to the Assam government in March.

The company also acquired a 36.6% stake from its partner OQ, the national oil company of Oman, in Bharat Oman Refinery Ltd (BORL) for 2,400 crore in March. The company, however, said that it has no intention to sell its stakes in either Indraprastha Gas (IGL) or Petronet LNG Ltd (PLL).

“We have no intention to pare our stake in either IGL or PLL. There would be a need for an open offer in line with the Securities and Exchange Board of India (Sebi) regulations. We are working closely with the government of India on this to ensure we avoid the requirement of an open offer and the requirement of paring our stake, as we have a feeling that any paring of stakes will be value destructive for BPCL," he added.

BPCL holds a 12.5% share in liquefied natural gas importer PLL, and a 22.5% stake in Delhi-based city gas distributor IGL.

BPCL is a co-promoter and holds board positions in both companies.

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