Monday, May 29, 2023

BPCL Privatization Stalled After Bidders Withdrew Central Government BPCL…

BPCL Disinvestment: The privatization of public sector petroleum company Bharat Petroleum Corporation Limited (BPCL) has come to a halt. Two bidders withdrew due to lack of clarity on fuel prices, leaving only one bidder in the race to acquire the company. The government had planned to sell its entire 52.98 per cent stake in BPCL and had invited expressions of interest from the bidders in March 2020.

Know why the process of disinvestment stopped?
Let us tell you that till November 2020, there were at least three bids, but after the others withdrew their offers, now only one bidder is left in the race to take over BPCL. According to information received from the sources, “We have only one bidder and it does not mean that one bidder imposes its own conditions… so the disinvestment process is currently on hold.”

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not getting buyers
The second largest public sector oil refining and fuel marketing company in India could not find many buyers. The main reason for this was lack of clarity in domestic fuel pricing. Public sector fuel retailers sell petrol and diesel at below-cost prices. This makes it difficult for private sector retailers to either sell fuel at a loss or lose the market.

withdrawn bids
Anil Agarwal’s Vedanta Group and American venture funds Apollo Global Management Inc and I Squared Capital Advisors had shown interest in buying the government’s 53 per cent stake in BPCL. However, later both the global investors withdrew their bids.

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Government will consider privatization in a new way
The source said that the government has not invited financial bids. After finalizing the terms and conditions of the share purchase agreement, the government was to invite financial bids. It is discussed that the government now wants to take a fresh look at the privatization of BPCL, including revising the terms of the sale.

The information was given by the chairman of Vedanta
Another source said considering the geo-political situation and energy shifts, the government may offer a 26 per cent stake with management control. The government has not made any formal statement on the withdrawal of BPCL’s disinvestment process. Vedanta Chairman Anil Agarwal had told that the government has withdrawn its offer to sell its stake in BPCL and will come up with a new plan.

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