The privatization of India’s second largest oil refiner BPCL has been pushed back to the next financial year as no bidders visited the company’s premises in the previous quarter, a senior company official said on Wednesday.
The government is selling its entire 52.98% stake in BPCL, for which it has received three expressions of interest, including one from the Anil Agarwal-led Vedanta group.
Financial bids are yet to be called.
On a call with analysts, BPCL director-finance VRK Gupta said the company continues to update data for bidders and is responding to their queries.
During the third quarter (October-December 2021) “no major incidents in terms of visits of bidders to our company premises took place and the status quo remains the same”, he said.
“We have no significant role in the disinvestment process,” he said. “Whatever the due diligence, the data requirements are, every quarter we update the data requirements in the portal, and the bidders are accessing the data continuously.” He said that BPCL is updating the data room information and answering the queries of the bidders.
“We are constantly updating, and we are getting some questions and we are answering, the process is on,” he said.
His statement that no bidders have visited the Company’s premises implies that either the three bidders have completed physical exertion or they have taken a break for now.
BPCL had opened a virtual data room in April 2021, containing mostly financial information of the company, and access was given to eligible bidders who signed a confidentiality undertaking (CU).
The bidders, which include private equity firm Apollo Global and I Square Capital’s arm ThinkGas, besides Vedanta, were subsequently allowed physical inspection of properties such as refineries and depots as part of the due diligence process.
Once the bidders had completed due diligence and the terms and conditions of the share purchase agreement (SPA) were negotiated, the government had to seek financial bids.
Sources said that some data which is commercially sensitive is uploaded in a separate section of the data room called ‘Clean Data Room’ and in the interest of privacy and prevention of misuse, up to the designated team of lawyers of the qualified bidders. Only access is granted. figures.
Gupta said the government has indicated that privatization may not happen before March, and may even be pushed to the next financial year.
“Yesterday (in the budget) also they have indicated that it cannot happen before March 2022, it can be pushed to the next financial year,” he said.
The privatization of BPCL needs to achieve certain milestones before the financial bids can be called. A minimum price needs to be set for bidding and a sell-purchase agreement needs to be finalized.
“There are certain milestones which have to be achieved before the financial bids can be called. That whole process is being done by Deepam only. On our part, we have to provide whatever data is available on a quarterly basis, and we have to answer the question,” he said.
A special purpose vehicle issued by BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources Plc submitted an EOI to buy government stake in BPCL before the deadline on November 16, 2020.
While I Squared Capital is a private equity firm focusing on global infrastructure investments, New York-based Apollo Global Management, Inc. is a global alternative investment manager firm.
I Squared Capital invests in energy, utilities, transportation and telecommunications projects in North America, Europe and select high growth economies such as India and China.
BPCL will give about 15.33 per cent of India’s refining capacity and 22 per cent of the fuel marketing stake to the buyer.
The company’s buyer will get 35.3 million tonne refining capacity – 12 million tonne Mumbai unit, 15.5 million tonne Kochi refinery and 7.8 million tonne Bina unit.
BPCL has over 19,000 petrol pumps, 6,166 LPG distributor agencies and 61 of the 260 aviation fueling stations in the country.
The firm also has an upstream presence with 26 properties in nine countries such as Russia, Brazil, Mozambique, United Arab Emirates, Indonesia, Australia, East Timor, Israel and India. It is also foraying into city gas distribution and has licenses for 37 Geographical Areas (GAs).
,