The government had first launched a tender for the mega privatization of BPCL in March of this year.
The initial tender for the privatization of the state-owned Bharat Petroleum Corporation Limited (BPCL) will end today. The government has been trying to divest its entire 52.98 percent stake in BPCL, the country’s second-largest oil refining and trading company. But it has already extended the deadline for interested parties to register their expressions of interest on four occasions. At Saturday’s closing price of Rs 412.70 on the BSE, the government’s 52.98 percent stake in BPCL is worth Rs 47,430 crore. The privatization of BPCL is essential for the government to meet its record goal of Rs 2.1 lakh-crore of divestment in 2020-21.
Here are 10 things to know about selling the government stake in BPCL:
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The latest bidding round for the privatization of BPCL comes at a time when restrictions related to the coronavirus pandemic have affected the global economy and companies, especially those operating in the oil and travel and tourism-related sectors. .
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Brent futures, the global benchmark for crude oil rates, are down 36.76 percent so far this year, though they have rallied almost twice from a two-decade low of $ 15.98. per barrel in April due to COVID-19.
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In the country’s largest privatization drive, the government had invited investors to submit offers in March this year. But since then, that term has been extended four times by the Department of Investment and Management of Public Assets (DIPAM). The government has said that there will be no further extensions.
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There are indications that UK oil majors BP Plc, France’s Total, Saudi Arabia’s Aramco and Russia’s Rosneft are not very keen on bidding due to the close to $ 10 billion asking price required to buy the company, agency News Agency Press Trust of India reported citing industry sources.
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Given the uncertain demand scenario, investors are weighing the acquisition of Bharat Petroleum Corporation, they said.
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The acquirer will also have to make an open offer to buy another 26 percent stake from the public, which would cost Rs 23,276 crore.
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Private companies with a net worth of $ 10 billion are eligible to bid, and consortia of up to four companies can bid. The lead member of the consortium must have a 40 percent stake, while others must have a minimum net worth of $ 1 billion each.
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The tender will be carried out in two stages. Qualified bidders in the first round will be asked to make a financial offer in the second round.
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The company distributes 21 percent of the petroleum products consumed in the country by volume, as of March, and has more than a fifth of the 250 aviation fuel stations in the country.
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BPCL will give buyers immediate access to 15.3 percent of the country’s oil refining capacity and 22 percent of its fuel market share in the world’s fastest growing energy market. 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.
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