Government extends bid submission deadline for stake in Bharat Petroleum to September 30

The government has extended the deadline for inviting expressions of interest for its stake sale in Bharat Petroleum Corp Ltd to September 30.
The two month extension is the third time the government has given more time to potential bidders, owing to the Covid 19 pandemic.

"In view of requests received from the interested bidders and the prevailing situation arising out of Covid 19, Government has decided to extend the last date for submission of EOI for BPCL strategic disinvestment to 30th September 2020," Tuhin Kanta Pandey, secretary of the department of investment and public asset management (DIPAM) said on Twitter.

The top department official recently said that the government’s divestment drive had hit a roadblock because the pandemic had shut down international travel and site visits, impacting the time taken by investors to decide on strategic decisions.

“Investors prefer to engage deeply with the government, which involves travel, site visits and international travel, which has stopped due to the pandemic,” he had said.

The government wants to sell its 52.98% stake in BPCL, along with transfer of management control, to a strategic buyer. The sale will not include BPCL’s equity shareholding of 61.65% in Numaligarh Refinery.

The government has set a disinvestment target of Rs 2.1 lakh crore for 2020-21. Of this, Rs 1.2 lakh crore will come from disinvestment of public sector undertakings and Rs 90,000 crore from sale of stake in financial institutions.

For BPCL, a minimum net worth of $10 billion for bidders is one of the eligibility criteria. Public sector units with 51% government ownership are excluded from the bidding process.

Any consortium bidding for a stake in the oil refiner and marketer cannot have more than four members, each with a minimum net worth of $1 billion. The lead member of the consortium should have a minimum equity contribution of 40%.

The government will specify conditions – including employee protection, asset stripping, business continuity, lock-in period of the shares bought and shareholding of consortium members – besides responsibilities and liabilities of the selected buyer, and of the consortium members, in the request for proposal or the share purchase agreement.

The confirmed buyer is required to make an open offer to public shareholders to acquire minimum 26% shares of BPCL. Deloitte Touche Tohmatsu India LLP has been appointed as the transaction advisor and manager of the strategic disinvestment process.