New Delhi : The central government-run energy major will come up with a new disinvestment plan for Bharat Petroleum Corporation Limited (BPCL) after the completion of its expansion plans.
In November 2020, the government had received bids for BPCL from mining major Vedanta Resources and private equity firm Apollo Global and ThinkGas, an arm of I Squared Capital. Vedant was the only player in the field after Think Gas was out. Thus the plan was scrapped, a senior government official informed about the developments.
Disinvestment was also affected by the Covid pandemic. Mint had earlier reported that higher oil prices and the shift towards renewable energy have also affected the prospects for disinvestment.
In the new plan, the government is likely to stick to its decision to sell its entire 52.98% stake in the company and transfer management control as part of strategic disinvestment to make the deal attractive.
Last month, Mint had reported that the government was weighing its options on strategic disinvestment of the state-run energy company, including whether it should return to the drawing board and restart the bidding process or the current disinvestment process. Some conditions need to be modified in However, such an amendment would mean a fresh process for the government to completely exit the profit-making fuel market.
The previous disinvestment proposal required the total assets of the bidders to be $10 billion, and public sector units with government ownership of 51% and above were excluded.
The new disinvestment plan is likely to be implemented once the expansion initiatives of BPCL are completed. The first official said the company has plans to expand Bina refinery in Madhya Pradesh and its green energy initiative. Bina Refinery is owned and operated by Bharat Oman Refineries Limited, a wholly owned subsidiary of BPCL. In addition, as part of its green energy initiative, the company is adding capacity in solar, wind, hydrogen space fuels with 2G ethanol bio-refineries.
Another official familiar with the government’s view on BPCL’s disinvestment said it has no plans to sell some stake as it will not excite potential investors.
BPCL sold its 61.65 per cent stake in Assam-based Numaligarh Refinery Limited in March 2021 for 9,875 crore to the Government of Assam and a consortium of Oil India Limited and Engineers India Limited as part of the privatization process. The first official said that ensuring the availability of fuel in every nook and corner of the country, including the remote areas of Leh and Lakshadweep, is a major challenge for the government. The official said that the government is confident of meeting the energy requirement of the country.
BPCL shares closed 332.00 on the BSE on Wednesday, down 3.05% from its previous close. Its market capitalization is 72,019.19 crores.
rituraj.baruah@livemint.com