The government has set $10 billion minimum net worth as one of the eligibility criteria in the expression of interest (EoI) for Bharat Petroleum Corporation Ltd. The EoI issued on Saturday has explicitly excluded public sector units having 51% government ownership from the bids to buy the government’s 52.98% stake in India’s second biggest oil refiner.
The department of investment and public asset management (Dipam) said in the document the consortium of investors that will bid for taking a stake in the oil refiner and marketer cannot have more than four members, and each must have a minimum net worth of $1 billion. The lead member should have 40% of the net worth proportionately.
“The Government of India is proposing strategic disinvestment of its entire shareholding in BPCLNSE 6.77 % comprising 114.91 crore equity shares, which constitutes 52.98% of BPCL’s equity share capital, along with transfer of management control, to a strategic buyer (except BPCL’s equity shareholding of 61.65% in Numaligarh Refinery),” the document said.
The government added that it would specify the 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 would have to make an open offer to public shareholders to acquire minimum 26% shares of BPCL, the document added. “The CSB (confirmed select bidder) will not be allowed to make the open offer conditional on any minimum level of acceptance…it will be required to put in escrow in cash the entire consideration payable under the open offer assuming full acceptance of the open offer,” the EoI noted.
The Cabinet had approved the sale of the profit-making company last year. Dipam, along with the oil ministry, had undertaken roadshows in the US, London and Dubai to seek investor interest. A senior official had earlier told ET that there was “sufficient interest” in the stake sale.
While the last date for seeking clarification has been set at April 4, the last date for submission of EoI is May 2. Deloitte Touche Tohmatsu India LLP has been appointed the transaction advisor and manager of the strategic disinvestment process.
Source: Economic Times