The government made some interesting announcements pertaining to the BPCL privatization and here is what you must know about the proposed divestment.
· The government has already clarified that the last date for bidding for BPCL privatization would close on Monday 16 November and this has seen repeated postponements.
· This time around, the DIPAM Secretary, Tuhin Pandey, has already made it crystal clear that there would be no further extension irrespective of the circumstances.
· Under the government divestment plan, the government plans to sell its balance 52.98% stake in BPCL, as a block to a buyer who can also add business value.
· BPCL is India’s second largest refining and marketing company after IOCL and both these stocks gained this quarter on the back of better GRMs or gross refining margins.
· It is being discussed that British Petroleum, Total of France and Saudi Aramco may opt to stay out of the bid for BPCL, contrary to their earlier interest evinced.
· One reason for this hesitation is the open offer condition. This would take the total outlay for purchase of BPCL to $10 billion, including the open offer to shareholders.
· That effectively means that apart from shelling out Rs.47,000 crore for the 52.98% stake of the government in BPCL, the buyer will have to spend another Rs.23,000 crore.
· Under the SEBI takeover guidelines, the buyer will have to make an open offer at the same price to by another 26% from shareholders.
· BPCL earns Rs.8000 crore net profit on an annual basis mean it takes take the payback period to 10 years on an average assuming normal performance.
· This open offer requirement is one reason even Rosneft of Russia has expressed hesitation to participate in the BPCL bidding.
The government made some interesting announcements pertaining to the BPCL privatization and here is what you must know about the proposed divestment.
· The government has already clarified that the last date for bidding for BPCL privatization would close on Monday 16 November and this has seen repeated postponements.
· This time around, the DIPAM Secretary, Tuhin Pandey, has already made it crystal clear that there would be no further extension irrespective of the circumstances.
· Under the government divestment plan, the government plans to sell its balance 52.98% stake in BPCL, as a block to a buyer who can also add business value.
· BPCL is India’s second largest refining and marketing company after IOCL and both these stocks gained this quarter on the back of better GRMs or gross refining margins.
· It is being discussed that British Petroleum, Total of France and Saudi Aramco may opt to stay out of the bid for BPCL, contrary to their earlier interest evinced.
· One reason for this hesitation is the open offer condition. This would take the total outlay for purchase of BPCL to $10 billion, including the open offer to shareholders.
· That effectively means that apart from shelling out Rs.47,000 crore for the 52.98% stake of the government in BPCL, the buyer will have to spend another Rs.23,000 crore.
· Under the SEBI takeover guidelines, the buyer will have to make an open offer at the same price to by another 26% from shareholders.
· BPCL earns Rs.8000 crore net profit on an annual basis mean it takes take the payback period to 10 years on an average assuming normal performance.
· This open offer requirement is one reason even Rosneft of Russia has expressed hesitation to participate in the BPCL bidding.