Govt May Revise Terms Of Sale For Bpcl Privatisation

“We need to go back to the drawing board on BPCL. There are issues in terms of consortium formation, geopolitical situation and energy transition aspects,” an official said.

The government will not rush into selling the country’s second-biggest state refiner if it ends up with a lone suitor, DIPAM secy Tuhin Kanta Pandey had said earlier.

The government is selling its entire 52.98% stake in BPCL and invited Expression of Interest from bidders in March 2020 for selling BPCL and by November 2020 at least 3 bids had come in.

At the current market price, the 52.98% stake is valued at about ₹45,000 crore.

So far three suitors — the Vedanta group, Apollo Global Management Inc. and I Squared Capital Advisors — have expressed interest in buying the government’s 53% stake in BPCL. But with a couple of them failing to rope in global investors amid waning interest in fossil fuels, only Vedanta appears to be left in the race with commodities tycoon Anil Agarwal showing willingness to spend about $12 billion for the deal.

Financial bids are yet to be invited. The government was to seek financial bids once bidders completed due diligence and the terms and conditions of the share purchase agreement were finalised.

While the government is keen to complete the sale, it doesn’t want to rush through with the process and prefers to hand it over to a consortium with stronger technical and financial prowess. The more time it takes to sell state assets such as BPCL, the longer the government’s fiscal deficit will stay wide open — indications of which appeared by way of a lower-than-usual disinvestment target in the annual budget.

The official said the transition towards green and renewable fuel has made privatisation difficult in existing terms.

“The total stake that may be offered to potential buyers too needs a rethinking in current conditions and easing of terms to help investors in forming a consortium,” the official said.