InvestorQ : Has the divestment of BPCL been finalized and when it is expected?
vidhya Laxmi made post

Has the divestment of BPCL been finalized and when it is expected?

sarah Leo answered.
9 months ago

While the final date for the sale is yet to be finalized, the government has now informed that guidance on employee protection, asset stripping and business continuity will be provided to the qualified bidders at a later stage of the process.

As has been announced earlier, government will sell its entire 52.98% stake in BPCL to investors. Government will issue preliminary EOIs before the end of this month and post that the qualified bidders will be invited to submit their final price bids.

Labour is a key issue as any potential acquirer of BPCL would look to shed excess workforce, to improve efficiency and ROI. They will also look at stripping some of the land, property and other valuable assets into a separate unit and sell them. These are to be clarified.

The eventual acquirer of the 52.98% stake will have to make the mandatory open offer to buy 26% from minority shareholders on same terms. The government has been silent on the subject of whether any exemption will be provided.

It needs to be noted that prior to selling BPCL stake, its Numaligarh refinery will be hived off to a PSU. There is the risk that bond holders having $1.65 billion of BPCL bonds could block this sale of stake. It has mandated minimum net worth of $10 billion.

While individual and consortium bids will be permitted for BPCL, subsequent formation of consortia of qualifying bidders will not be permitted.