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The Assam government has indicated willingness to raise its stake in Numaligarh Refinery Limited (NRL) to 26 per cent from 12.35 per cent, setting the stage for Bharat Petroleum Corporation Ltd (BPCL) to sell the balance shares it holds in the subsidiary, along with transfer of management control to a Central Government company in the oil sector.
The 26 per cent stake will help the State government secure some privileges available to entities holding 26 per cent under the Companies Act.
The State government had the right of first refusal if BPCL is to sell its 61.65 per cent stake in NRL, a mini ratna PSU with capacity to process three million metric tonnes per annum (MMTPA) of crude, according to a memorandum of understanding signed by the two sides.
“The Assam government has responded to a BPCL request seeking its stand on exercising the right of first refusal over BPCL’s stake in NRL,” a government official briefed on the development said.
The government has decided to privatise BPCL after hiving off NRL, which will be sold to a Central Government company in the oil sector if Assam government decline to exercise its right of first refusal to buy the shares owned by BPCL in NRL.
On Saturday, the Central Government issued a global expression of interest (E0I) seeking bids for its 52.98 per cent stake in BPCL.
With the Assam government officially communicating to BPCL its desire to raise stake in NRL to 26 per cent, BPCL will have to sell 13.65 per cent of its 61.65 per cent stake in NRL to the state government.
The balance 48 per cent held by BPCL (post sale of 13.65 per cent to Assam government) will be sold to a government company, most likely Oil India Ltd, the government official mentioned earlier said. Oil India currently holds 26 per cent stake in NRL. This which will jump to 74 per cent after buying the 48 per cent take from BPCL, making it the majority shareholder of NRL.
The share-sale in NRL will be handled by the same transaction advisors and asset valuers appointed by the Department of Investment and Public Asset Management (DIPAM) for the stake-sale in BPCL. DIPAM has hired Deloitte Touche Tohmatsu India LLP to manage the deal.
BPCL will sell 13.65 per cent stake to the Assam government at the same price discovered in the bidding process for the sale of 48 per cent stake to a government oil company. “This will avoid the task of having to discover price only for the government of Assam,” the government official said.
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