NRI Dunia
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Government extends deadline to bid for BPCL till November 16

The government has for the fourth time extended the deadline for bidding for the privatisation of India’s second-biggest oil refiner Bharat Petroleum Corp Ltd (BPCL) by one and a half months to November 16.

While the Cabinet, in November last year, had approved the sale of the government’s entire 52.98 percent stake in BPCL, offers seeking expression of interest (EoI) or bids showing interest in buying its stake were invited only on March 7.

Initially, the EoI submission deadline was May 2, but it was first was extended up to June 13, then to July 31 and later to September 30.

“In view of further requests received from the interested bidders (IBs) and the prevailing situation arising out of COVID-19 pandemic, the last date for submission of EoIs is further extended to November 16, 2020 (by 5.00 pm),” the Department of Investment and Public Asset Management (DIPAM) said in a notice.

The government is keen to close the sale before March 31, 2021, to help meet a record Rs 2.1 lakh crore target which Finance Minister Nirmala Sitharaman has set from disinvestment proceeds in the Budget for 2020-21.

But with this extension, the sale being completed by March 2021 looks doubtful as after EoIs come in, the government will open a data center for interested bidders to conduct due diligence, only after which financial bids will be called, industry sources said.

The financial bids will have to be evaluated and approved by the Cabinet and the transaction will close once the payment is made.

At Wednesday’s trading price of Rs 360.55 on the BSE, BPCL has a market capitalization of about Rs 78,300 crore. At this price, the government’s stake is worth over Rs 41,436 crore.

The acquirer will also have to make an open offer to minority shareholders for buying up to 26 percent stake at the same price.

The government of India is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 114.91 crore equity shares, which constitutes 52.98 percent of BPCL’s equity share capital along with transfer of management control to a strategic buyer (except BPCL’s equity shareholding of 61.65 percent in Numaligarh Refinery), the notice inviting offer said.

Numaligarh Refinery stake will be sold to a state-owned oil and gas firm.