Centre may get part of Numaligarh Refinery sale proceeds through special dividend

Shishir Sinha/Richa Mishra New Delhi | Updated on March 03, 2021

BPCL privatisation expected to be completed by July-Sept quarter of FY 22

Over 3.73 lakh shareholders of Bharat Petroleum Corporation Ltd (BPCL) may get special dividend from the sales proceed of its subsidiary Numaligarh Refinery Limited (NRL). The company has called Extraordinary General Meeting on March 25 to formally approve disinvestment of the entire equity shares (61.65 per cent) held in NRL and expectations are that special dividend could be announced by that time.

The Central Government is the largest shareholder with around 53 per cent holdings. The total sales proceed from the sale of NRL is estimated at around ₹ 9,876 crore and after deduction of tax, net proceed could be around ₹ 9,000 crore.

“Though the money will go to company’s balance sheet, the government may get special dividend out of that,” a senior government official told BusinessLine. If approved, this will be second dividend payout during the current fiscal. On February 8, BPCL’s board had announced interim dividend of ₹ 16 per equity share of face value ₹10 each for the financial Year 2020-21.

Part of the sales proceed is also expected to be used for acquisition of remaining 36.62 per cent share of OQ (formerly known as Oman Oil Company) in Bharat Oman Refineries Limited (BORL) at Bina, Madhya Pradesh. Total cost of this acquisition is estimated at around ₹ 2,400 crore. This transaction is expected to be completed by March 31. With this transaction, BPCL will have 100 per cent holding in BORL.

According to officials, the entire restructuring exercise was important before going for the actual privatisation. The government intends to sell its entire 53 per cent along with control and management. It has already received multiple expression of interest (EoIs) from private parties. Now, financial bids will be invited from qualified bidders and based on that final bidder will be selected.

“Normally, there are two methods for financial bidding – one on the basis of floor price/reserve price which is known to all and other when reserve price is not known to anyone,” the official said, adding that second option has been exercised in the case of BPCL. The official was hopeful that the privatisation process will be completed by July-September quarter (second quarter) of FY 2021-22.

On the human resource challenges, the official refuted allegations about any problem. He said that though Employee Stock Purchase Scheme is very uncommon in Central Public Sector Undertakings, still BPCL decided to bring this scheme for its employees.

On October 22, in a filing to the exchanges the company said with the proposal of strategic disinvestment along with transfer of management control to the investor, it intends reward its Eligible Employees in due recognition of their association and loyalty with the company; enabling its Eligible Employees to become co-owners seeking alignment of their interest with that of owners; and providing a share in the value created in the company over a period of time, as well as to give an opportunity to reap value out of corporate growth in future.

The company offered 4.33 crore shares under the scheme with maximum of 9,000 shares to individual employee. Only Employees who have completed 5 years of continued employment or service in the Company as on Offer Date are eligible under the Scheme. The scheme came into effect from September 28, 2020

Published on March 03, 2021

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