Bharat Petroleum Corporation Ltd (BPCL) will buy the 36.62 per cent equity shares it does not own in Bharat Oman Refineries Ltd (BORL) from OQ S.A.0.C.(formerly known as Oman Oil Company S.A.O.C) at ₹27 a share, in a deal worth ₹2,399.26 crore.

The transaction, when closed, will make BORL, which runs a 7.8-million tonne (mt) capacity refinery at Bina in Madhya Pradesh, a 100 per cent unit of BPCL. It will also improve the valuation of the ‘Maharatna’ PSU which has been put up for privatisation by the government.

BPCL said it has sufficient internal resources to finance the stake purchase without resorting to borrowing.

Oil industry sources said that BPCL was able to negotiate a “very low price” with OQ for the stake purchase.

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The transaction will be the first step towards merging BORL with BPCL.

“The merger will happen, but... not... immediately, as it requires a lot of formalities to conclude. We are only going to increase the stake to 100 per cent and avoid the complications of another partner who does not have a long-term interest in India to create issues for us and the new private owner of BPCL,” a top company official told BusinessLine in December.

“Our immediate effort is to complete the formalities and make BORL a 100 per cent subsidiary,” he had said. “Then, it becomes easy, if at all anybody wants to have a merger, whether we do it or the new private owner of BPCL does it, we don’t have to ask anybody for consent except from a regulatory perspective,” he added.

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BPCL is also in talks with the Government of Madhya Pradesh (GoMP) for acquiring the 2.69 crore convertible share warrants held by GoMP in BORL.

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