The government on Wednesday extended the deadline for submission of initial bids for Bharat Petroleum Corp Ltd (BPCL) by one and half months. "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 expressions of interest (EoIs) is further extended to November 16, 2020 (by 5.00 pm)," an official order said.
This is the fourth time the deadline has been extended since the initial announcement in November 2019. PSUs "are not eligible to participate" in the privatisation, the offer document said.
Any private company having a networth of $10 billion is eligible for bidding and a consortium of no more than four firms will be allowed to bid, it said.
As per the bidding criteria, the lead member of the consortium must hold 40 per cent stake and others must have a minimum net worth of $1 billion.
Changes in consortium are allowed within 45 days but the lead member cannot be changed, it added.
BPCL will give buyers ready access to 14 per cent of India's oil refining capacity and about one-fourth of the fuel market share in the world's fastest-growing energy market.
BPCL has a market capitalisation of about Rs 87,388 crore and the government stake at current prices is worth about Rs 46,000 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the same price.
Privatisation of BPCL is essential for meeting the record Rs 2.1 lakh crore target Finance Minister Nirmala Sitharaman has set from disinvestment proceeds in the Budget for 2020-21.
BPCL operates four refineries in Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15 per cent of India's total refining capacity of 249.4 million tonnes.
While the government is selling its entire 52.98 per cent stake in BPCL, it intends to sell the firm's 61.7 per cent owned subsidiary, Numaligarh Refinery Ltd (NRL), to another state-owned enterprise as part of BPCL's divestment process.
NRL has negligible debt, although the refinery contributes 6-8 per cent of BPCL's throughput and generates better GRMs than BPCL''s other refineries given its higher complexity and tax benefits, contributing 18 per cent of BPCL''s EBITDA.
The valuation at which NRL is sold will determine the credit impact on BPCL, should NRL's sale proceeds be used to reduce debt at BPCL.
(With PTI inputs)
