Privatisation-bound Bharat Petroleum Corporation (BPCL) could promote part of its stake in Petronet LNG and Indraprastha Gas (IGL) to shed its promoter standing to obviate the necessity for its new proprietor to make open affords for the 2 gasoline firms, sources stated.
BPCL holds 12.5 per cent of shareholding in India’s largest liquefied pure gasoline importer, Petronet, and a 22.5 per cent stake in metropolis gasoline retailer, IGL. It is a promoter of each the listed firms and holds board positions.
As per the authorized place evaluated by Department of Investment and Public Asset Management (DIPAM) – the division working the method on the market of presidency’s whole 52.98 per cent stake in BPCL – the acquirer of BPCL should make an open supply to the minority shareholders of Petronet and IGL for acquisition of 26 per cent shares, three sources with information of the matter stated.
This is as a result of BPCL is a promoter of the 2 firms and since there’s a change in possession of the promoter agency, an open supply is triggered underneath Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
A means out could possibly be for BPCL to promote part of its shareholding within the two corporations and shed promoter standing, thereby obviating the necessity for open affords, sources stated.
BPCL, nonetheless, is just not in favour of promoting the stake and giving up promoter standing and directorships will end in substantial worth erosion for the corporate.
But the pondering within the authorities is that the open affords for Petronet and IGL could deter bidders who’re principally eyeing BPCL’s oil refining property and 22 per cent share of the gas advertising enterprise it instructions, sources stated.
BPCL spokesperson refused feedback for the story.
The authorities’s 52.98 p.c stake in BPCL is valued at about Rs 54,000 crore on the present share buying and selling worth. The requirement for making an open supply for extra 26 per cent to minority shareholders of the corporate will value a further Rs 26,700 crore.
On high of it, an open supply for 26 per cent stake in IGL would value the acquirer a further Rs 9,400 crore and an analogous supply for Petronet would value over Rs 9,300 crore.
Bidders, sources stated, could not discover BPCL holding stake in Petronet and IGL a worth proposition as such a stake doesn’t give them any particular rights equivalent to getting choice in importing of LNG at terminals of Petronet or a say in gasoline retailing by IGL.
They stated the choice of BPCL promoting part of its shareholding in Petronet and IGL has been mentioned throughout conferences with DIPAM.
In these conferences, BPCL administration highlighted that one of the best various can be to get Securities and Exchange Board of India (Sebi) to present exemption for open supply to the profitable bidder of BPCL as already executed when ONGC acquired authorities stake in HPCL.
But in case of ONGC-HPCL deal, the promoters of each the corporations have been the identical i.e. the federal government of India and there wasn’t a change of possession per se.
Sources stated BPCL administration additionally identified that the Cabinet Committee on Economic Affairs (CCEA) approval for privatisation of BPCL didn’t point out any discount in shareholding in Petronet and IGL.
Also, the expression of curiosity (EoI) floated for stake sale in BPCL additionally didn’t point out any discount in shareholding in Petronet and IGL.
On these, DIPAM can strategy the CCEA once more and get a nod for stake sale in Petronet and IGL, they stated.
Mining-to-oil conglomerate Vedanta and personal fairness corporations Apollo Global and I Squared Capital’s arm Think Gas are within the race to purchase authorities stake in BPCL.
The stake sale in India’s second-largest gas retailer is essential to plans to boost a file Rs 1.75 lakh crore from disinvestment proceeds in fiscal 2021-22 (April 2021 to March 2022).
BPCL will give the customer possession of round 15.33 per cent of India’s oil refining capability and 22 per cent of the gas advertising share.
The purchaser of the corporate will get 35.3 million tonnes of refining capability — 12 million tonne Mumbai unit, 15.5 million tonne Kochi refinery and seven.8 million tonne Bina unit.
BPCL additionally owns 18,639 petrol pumps, 6,166 LPG distributor businesses and 61 out of 260 aviation gas stations within the nation.
The agency additionally has upstream presence with 26 property in 9 international locations equivalent to Russia, Brazil, Mozambique, the UAE, Indonesia, Australia, East Timor, Israel and India. It can be making a foray into metropolis gasoline distribution and has licences for 37 geographical areas (GAs).
