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Govt invites bids for sale of BPCL

Shishir Sinha New Delhi | Updated on March 07, 2020 Published on March 07, 2020

The Government has invited ‘Expression of Interest (EoI)’ for selling its entire stake in oil marketing company Bharat Petroleum Corporation Limited (BPCL). 

According to latest shareholding pattern, Government holds 52.98 per cent (over 114.91 crore shares). The Government intends to disinvest this holding along with transfer of management control to a strategic buyer. However, this does not include BPCL’s equity shareholding of 61.65 per cent in Numaligarh Refinery Limited (NRL) and management control thereon. The shareholding of BPCL in NRL will be transferred to a Central Public Sector Enterprise (CPSE) operating in the Oil & Gas sector.

Last date for EoI submission

According to Preliminary Information Memorandum (PIM), last date for submission of EoI is May 2. The PIM will assist potential bidder to evaluate acquiring the stake, accordingly submit an EoI. This will be used for pre-qualifying the interested parties (IPs) in accordance with eligibility criteria and disqualification conditions.

“Purchasing the offered stake in BPCL is a unique opportunity for an investing company to acquire management control in a vertically integrated oil and gas company, with investments in refining, marketing, upstream and gas business. BPCL group, comprising of 10 subsidiaries, 24 joint ventures and 12 associate companies, has operations in various business lines in the Hydrocarbon value chain spanning across India as well as overseas,” PIM mentioned. 

Only those IPs who qualify in accordance with these criterion and conditions will be allowed to participate in second stage of the sale process. The qualified IPs will be provided with Request for Proposal (RFP), and providing further details of the company. Thereafter, financial bids submitted by the qualified IPs as per the terms of the RFP will be opened and evaluated as per procedure laid down by the Government and accordingly final bidder will be announced.

Eligibility

Talking about eligibility criteria, PIM made it clear that IP’s minimum net worth should be $10 billion (nearly ₹74 thousand crore). Bidder can participate as sole or as consortium (maximum number of participants should be four4). IP could be private limited company, public limited company, Limited Liability Partnership (LLP), Alternative Investment Fund (AIF), or a company/ a fund incorporated outside India, which is eligible to invest in India under Indian laws. Bid can be made as solo or as consortium.

Management/employees of BPCL can also bid provided employees will have to incorporate a company, which only can submit the EoI, either itself as a Sole IP or as a member of a consortium. Such company must satisfy the minimum net worth criteria as specified 

An IP, which is required to prepare a profit & loss account, must have reported profits (profit after tax) in at least three out of the last five financial years. In the event that the IP is a consortium or a special purpose vehicle, the lead member must have profits (after tax) in at least three out of the last five financial years. 

The Government expects to get over ₹60,000 crore through this sale. The Government has set a target of ₹2.10 lakh crore through disinvestment during 2020-21.

Also Read
BPCL valuation high, evaluating bid: Anil Agarwal
 

 

Published on March 07, 2020

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