BPCL privatisation by March-end: Chairman
The disinvestment of Bharat Petroleum Corporation (BPCL) is likely to be completed by March 2022, according to Chairman Arun Kumar Singh.
Speaking at a press meet after the annual general meeting (AGM) of the company on Monday, Singh said, “The government, at many forums and instances, has said it intends to complete the transaction within this financial year. This means by March 2022.”
In August 2021, Tuhin Kant Pandey, secretary at the department of investment and public asset management, had said the government plans to complete the privatisation of Air India and BPCL this year. But in the first week of September 2021, Fitch Ratings noted that there may be delays in BPCL’S selloff . “Bidders are conducting due diligence, but uncertainty over bidder consortiums and process complexity, including valuation, may lead to potential delays,” it said.
Vedanta, Apollo Global, and I Squared Capital had responded to the Centre’s call for shedding its controlling stake in BPCL.
The Centre has 52.98 per cent shareholding in the public sector undertaking. The prospective buyer may have to shell out over ~50,000 crore for controlling stake at the present valuation.
BPCL’S data room was opened in April 2021 to allow bidders access to financial data of the refiner and better assess the valuation. Another aspect that requires clarity is BPCL’S stake in Indraprastha Gas and Petronet LNG, in lieu of the imminent privatisation.
Responding to a query on this, Singh said, “We wrote to Securities and Exchange Board of India, seeking waiver for the open offer. But we are yet to hear from them. Based on the response from Sebi, DIPAM, the ministry of petroleum and all government bodies will take a decision on what to do. It is a little early for a firm answer to the Petronet and IGL issues. All these questions start from the open offer issue, and current regulations warrant an open offer should there be an acquisition of BPCL by anyone.”
This is a position that BPCL has maintained since August 2021. According to the legal position evaluated by DIPAM, BPCL’S acquirer will have to make open offers to the minority shareholders of Petronet LNG and IGL for the acquisition of 26 per cent stake.