New Delhi: The government on Thursday withdrew its offer to sell its entire 53 per cent stake in BPCL, saying most of the bidders have expressed their inability to participate in the ongoing privatization process due to the prevailing conditions in the global energy market.
The government had planned to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Limited (BPCL) and had invited Expression of Interest (EoI) from bidders in March 2020. There were at least three bids till November 2020.
However, the privatization was stalled after two bidders ran into issues like lack of clarity in fuel pricing, with only one bidder left in the fray.
The Department of Investment and Public Asset Management (DIPAM) said that several EoIs were received from interested parties in response to the invitation. Qualified Interested Parties (QIPs) had initiated due diligence of the company.
However, several COVID-19 waves and geopolitical conditions affected industries globally, especially the oil and gas industry.
“Due to the prevailing conditions in the global energy market, most of the QIPs have expressed their inability to continue with the current process of disinvestment of BPCL,” it said.
In view of this, the Group of Ministers on Disinvestment has decided to discontinue the current EOI process for strategic disinvestment of BPCL and the EOI received from the QIP will stand cancelled, Dipam said.
A decision on restarting the strategic disinvestment process of BPCL will be taken at an appropriate time based on a review of the situation.
Shares of BPCL closed at Rs 324.25, down 0.54 per cent from its previous close on BSE.
The privatization of India’s second largest state oil refining and fuel marketing company did not attract much interest initially due to the volatile global oil price scenario and later due to lack of clarity in domestic fuel pricing.
Once the bidders had completed due diligence and the terms and conditions of the share purchase agreement were finalised, the government was to seek financial bids.
Mining mogul Anil Agarwal’s Vedanta Group and US venture funds Apollo Global Management Inc and I Squared Capital Advisors had shown interest in buying the government’s 53 per cent stake in BPCL.
But both funds were withdrawn after failing to engage global investors amid declining interest in fossil fuels.
Public sector fuel retailers, which control 90 per cent of the petrol and diesel market, sell these fuels at below-cost prices.
A source said the government is taking a fresh look at privatization of BPCL, including modifying the terms of the sale, to offer management control as well as 26 per cent stake in the company.
This would limit the amount the bidder would have to pay to buy the company.
BPCL is India’s second largest oil marketing company after IndianOil, and with refineries in Mumbai, Kochi and Madhya Pradesh, it has the third largest refining capacity after Reliance and IndianOil.
This report is automatically generated from PTI news service. ThePrint assumes no responsibility for its contents.
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