Vedanta Group is willing to spend $12 billion to acquire India’s state-owned refiner Bharat Petroleum Corp., an asset sale that’s among the nation’s biggest and which has faced delays in completion.
“We’re not going to bid aggressively, but we will put the right price,” billionaire chairman Anil Agarwal said in an interview in Riyadh on Wednesday. “The market cap of the company is about $11 billion to $12 billion, so this is the amount of investment we’re looking at.”
India’s plan to privatize BPCL has run into rough weather with bidders struggling to find partners and spread their financial risks for the big-ticket acquisition. The country was expecting global oil majors to team up with investment funds to participate in the sale. But some bidders are finding it difficult to invest due to global sustainability rules that make it tougher for them to make large investments in fossil fuels.
The sale, potentially the country’s biggest privatization, is crucial for the government because it needs to raise revenues for its spending programs. It’s already missed a September deadline to complete the sale of its entire 53% stake in BPCL, the country’s second-biggest state refiner. The company’s current market capitalization is around 848.27 billion rupees ($11.4 billion).