State-owned Bharat Petroleum Corp Ltd (BPCL) has offered its employees stock options at a third of the market price as the company seeks to reward staff prior to its privatization.
BPCL’s board on Friday “approved the proposed Employee Stock Purchase Plan (ESPS) to specified employees through the trust mechanism, subject to shareholder approval,” the company said in a regulatory document.
While BPCL did not elaborate, a source with direct knowledge of the development said that ‘BPCL Trust for Investment in Shares’ owns about 9.33 percent of the company’s paid-up share capital.
Of this, 2 percent will be offered to employees at one-third the price of BPCL vouchers in the previous six months, he said.
There will be no change in the government’s stake in the company.
The government is selling its entire 52.98 percent stake in BPCL to a strategic investor. Expression of Interest (EoI) for privatization expires September 30.
“The Trust formed for this purpose will purchase the aforementioned shares of the ‘BPCL Trust for Investment in Shares’ through secondary acquisition through the stock exchanges in accordance with the SEBI Regulations (Benefits for Employees Based on Shares) of 2014 and other applicable laws”. the company said in the regulatory filing.
The source said that the number of shares to be offered under the PTU will depend on the grade of the employee and even the directors of the company’s board of directors would be eligible for the offer.
There will be a one-year blackout period for shares that employees purchase under the ESPS, he added.
BPCL, he said, has yet to decide what to do with the residual 7.33 percent stake held by the Trust.
‘BPCL Trust for Investment in Shares’ is an independent entity, of which the BPCL company is a beneficiary.
The PTU will be run in strict compliance with SEBI rules, the person said, adding that BPCL will seek shareholder approval for the scheme at its next annual general meeting (AGM) later this month.
After approval by shareholders, BPCL will make an earlier offer to employees.
BPCL closed at ₹403.40 per share on the BSE on Friday.
Last month, it offered a voluntary retirement plan (VRS) to some of its employees as part of the planned privatization.
About 1,200 employees are likely to receive VRS, the source said.
BPCL stake sale crucial to meet government record ₹Rs 2.1 crore lakh divestment target for the current fiscal year.
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