BPCL spurts after centre invites bids for stake sale

Bharat Petroleum Corporation (BPCL) soared 8.58% to Rs 437.40 after the government on Saturday, 7 March 2020, invited bids for the sale of its entire 52.98% stake in BPCL.

The Government of India (GoI) is proposing a strategic disinvestment of its entire shareholding in BPCL, comprising of 1,14,91,83,592 equity shares held through Ministry of Petroleum and Natural Gas (MoPNG), 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 (NRL), and management control thereon). The shareholding of BPCL in NRL will be transferred to a Central Public Sector Enterprise (CPSE) operating in the oil & gas sector under MoPNG and accordingly is not part of the proposed transaction.

The confirmed selected bidder (CSB) could be required to undertake certain obligations relating to certain matters, such as, employee protection, asset stripping, business continuity, lock-in of the shares acquired in the proposed transaction, and/or shareholding of consortium members in the investment vehicle. These conditions, and those relating to the respective responsibilities and liabilities of the CSB and the consortium members (if any), shall be specified in the Request for Proposal (RFP) / share purchase agreement (SPA).

The interested party (IP) may bid as a sole bidder or as a consortium. In case of consortium, there should be one Lead Member. The consortium 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.

CSB is required to make an open offer to public shareholders to acquire minimum 26% shares of BPCL. The CSB will not be allowed to make the open offer conditional on any minimum level of acceptance. The CSB will be required to put in escrow in cash the entire consideration payable under the open offer assuming full acceptance of the open offer.

While the last date for seeking clarification has been set at 4 April 2020, the last date for submission of EoI is 2 May 2020. Deloitte Touche Tohmatsu India LLP has been appointed the transaction advisor and manager of the strategic disinvestment process.

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