New Delhi: The government has received three preliminary offers to buy a majority stake in India’s second-largest fuel retailer, Bharat Petroleum Corporation Ltd (BPCL), Oil Minister Dharmendra Pradhan said on Wednesday. Oil mining conglomerate Vedanta confirmed on November 18 that it had submitted an expression of interest (EoI) to buy the government’s 52.98% stake in BPCL. The other two bidders are said to be global funds, one of them being Apollo Global Management.
“There is a lot of interest,” Pradhan said in a webinar series on ‘The Road to Atmanirbhar Bharat’ organized by Swarajya magazine. “The DIPAM has recently informed the market … I think three parties have granted the EoI for the bidding process.”
He did not give details.
Tuhin Kanta Pandey, secretary of the Department of Investment and Management of Public Assets (DIPAM), which is in charge of the strategic sale, tweeted on November 16, the last date for the tender, that the transaction advisers (TA) of the sale reported receiving “multiple expressions of interest.”
“The transaction will move to the second stage after scrutiny by TA,” he said.
Pradhan said the government is seeking to privatize some of the state-owned companies to generate professionalism and competition.
“As I said before, the government is committed to getting rid of its participation in some state companies. That way more professionalism and competition will come. We are committed and enthusiastic in that regard,” he said.
A special purpose vehicle presented by Vedanta Ltd, which is listed on the BSE, and its London-based parent Vedanta Resources, filed an EoI prior to the close of the deadline on November 16.
The government is selling its entire 52.98 percent stake in BPCL as part of plans to raise a record Rs 2.1 crore from divestment proceeds in 2020-21 (April 2020 to March 2021).
But BPCL’s share price has plummeted nearly a quarter since the strategic sale was approved in November last year.
At Wednesday’s listing price of 385 rupees on the BSE, the government’s 52.98 percent stake in BPCL is worth just over 44,200 crore. In addition, the acquirer would have to make an open offer to buy another 26 percent stake from the public, which would cost around 21.6 billion rupees.
Vedanta’s interest in BPCL stems from its $ 8.67 billion acquisition of oil producer Cairn India nearly a decade ago. The company produces oil from the Rajasthan oil fields that is used in refineries such as those operated by BPCL to convert it into gasoline, diesel and other fuels.
Sources said transaction advisers have begun evaluating EoIs to determine whether bidders meet the qualification criteria and have the financial power to make the acquisition.
This process can take two to three weeks, then a request for proposal (RFP) will be issued and financial offers will be sought.
BPCL will give the buyer ownership of 15.33 percent of India’s oil refining capacity and 22 percent of the fuel trading share.
BPCL operates four refineries in Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38.3 million tons per year, which is 15.3% of total capacity. refining of India of 249.8 million. tons.
While the Numaligarh refinery will be extracted from BPCL and sold to a power source, the company’s new buyer will get 35.3 million tons of refining capacity: 12 million tons of Mumbai unit, 15.5 million tons from Kochi refinery and 7.8 million tons from Bina.
It also has 17,355 gasoline pumps, 6,156 LPG distribution agencies and 61 of the 256 aviation fuel stations in the country.
BPCL is the second largest oil trading company in India with an independent domestic sales volume of more than 43.10 million tonnes and a market share of 22 percent during fiscal year 2020. It is the sixth largest company India’s largest by turnover.
Its gasoline pumps sell more fuel than the industry average – BPCL pumps sell 124 kiloliters per month compared to the industry average of 116, according to the company’s website.
The firm also has an upstream presence with 26 assets in nine countries including Russia, Brazil, Mozambique, the United Arab Emirates, Indonesia, Australia, East Timor, Israel and India. It is also venturing into urban gas distribution and has licenses for 37 geographic areas (GA).
.
