Government invites bids for sale of Bharat Petroleum
NEW DELHI: The government on Saturday has invited preliminary bids for privatisation of the country’s second-biggest oil refiner, Bharat Petroleum Corporation Ltd (BPCL), as it needs money from disinvestment to plug a budget gap.
According to the bid document issued by the Department of Investment and Public Asset Management (DIPAM), one of the eligibility criteria to participate in the Expression of Interest is a minimum net worth of $10 billion.
In case of a consortium of investors bidding for taking a stake in the oil refiner and marketer, the minimum net worth for each member has been set at $1 billion, DIPAM said. The last date for submission of Expressions of Interest is May 2.
“CPSEs and Central government-owned cooperative societies, where the government ownership is 51 per cent or more, are not eligible to participate in the proposed transaction,” the bid document said.
The Centre will set the reserve price for the stake sale after receiving bids and the selected bidder will have to make an open offer to acquire at least another 26 per cent stake from minority shareholders and put the money in escrow for the entire offer.
At the close of trading on Friday, BPCL had a market capitalisation of Rs 92,464.40 crore. At this price, the government’s Rs 52.98 per cent stake that is being sold in the country’s largest privatisation exercise is worth about Rs 49,000 crore.
The acquirer will also be required to make an open offer for another 26 per cent stake from minority shareholders, which will cost another Rs 24,000 crore.
Mining baron Anil Agarwal, who was among the first to evince interest in bidding for BPCL, had earlier said that the valuations were too high.
“There are a lot of synergies BPCL has with our business. We certainly are interested in bidding but the valuations are too high. We will carefully evaluate the bidding,” he said.
The government expects to get about Rs 60,000 crore from selling its stake in the refiner. Overall, it has managed to garner just Rs 34,845 crore so far, of its Rs 2.10 lakh crore target through disinvestment during 2020-21.
State players kept out
“CPSEs and Central government-owned cooperative societies, where the government ownership is 51 per cent or more, are not eligible to participate in the proposed transaction,” the bid document said.