BPCL Stocks Surge As Saudi Aramco, Rosneft, Exxon Mobil, Abu Dhabi National Oil Co Enter Race To Acquire It

Shares of Bharat Petroleum Corporation (BPCL) surged by 7 per cent to Rs 421 on the BSE on Friday (Jul 17) with global oil majors and at least one Indian private player expressing interest in participating in the bidding process for BPCL, Business Standard reported.

In March this year, the Department of Investment and Public Asset Management (Dipam) released the Preliminary Information Memorandum (PIM) for inviting EoI for the strategic disinvestment of BPCL, along with transfer of management control.

Dipam this week provided detailed response to initial queries by potential bidders signalling government is committed to the privatisation process. The government has also clarified that all businesses of BPCL (including its gas assets) will be part of the deal

Saudi Aramco, Abu Dhabi National Oil Co (Adnoc), Rosneft of Russia and Exxon Mobil are among the global players participating in the bidding process for the PSU.

Business Standard also reported that Reliance Industries (RIL) may enter the race though it has recently focused on pivoting its core business away from energy sector. The report quoted analysts as saying that RIL may try to win the bid and could subsequently re-pitch the oil-to-chemicals business to Aramco at a higher valuation to self-fund BPCL’s acquisition.

The deadline for submitting EoIs has been postponed twice and the current deadline ends on 31 July.

The disinvestment in BPCL involves the government selling its entire 52.98 per cent stake in the company to a strategic investor with transfer of management control. The government has barred PSUs from bidding for BPCL and expects private sector Indian players and global MNCs to bid for its stake.

The Centre has allowed prospective bidders with a minimum net worth of $10 billion to present their bids.

Another condition pertains to a maximum of four members are permitted in a consortium, and the lead member must hold 40 per cent in proportion. Other members of the consortium must have a minimum $1 billion net worth.

The EOI allows changes in the consortium within 45 days, though the lead member cannot be changed.

The Indian government proposes to disinvest its entire shareholding in BPCL comprising 1,14,91,83,592 equity shares held through the Ministry of Petroleum and Natural Gas, which constitutes 52.98 per cent of BPCL's equity share capital, along with the transfer of management control to the strategic buyer (except BPCL's equity shareholding of 61.65 per cent in Numaligarh Refinery Ltd (NRL) and management control thereon).

The shareholding of BPCL in NRL will be transferred to a Central Public Sector Enterprise operating in the oil and gas sector under the Ministry and accordingly, is not a part of the proposed transaction.The government's stake in BPCL is worth around Rs 43,000 crore at BPCL's current share price.

(With inputs from IANS)