Global oil majors may be teaming up with investment funds that are already in the race to acquire Bharat Petroleum Corporation Ltd (BPCL), a document detailing steps needed to complete India's biggest privatisation showed. Billionaire
Anil Agarwal's Vedanta group as well as two US funds, Apollo Global and I Squared Capital, had last year submitted initial bids to buyout the government's entire 52.98 percent stake in India's third-biggest oil refiner and second-largest fuel retailer.
Detailing the 'Next Step', the 'Brief Note on
BPCL Disinvestment' said Transaction Advisor and Asset Valuer are to submit an inception report, bidders have to complete due diligence of the company, and sale-purchase agreement has to be finalised. Also, "security clearance" of bidders may be needed "since consortiums are being formed", it said without giving details.
The bidding process allows for other interested parties to join and form a consortium with any one of the bidders which had submitted an expression of interest (EoI). Firms run by Indian billionaires
Mukesh Ambani and
Gautam Adani as well as global oil majors such as Royal Dutch Shell, BP and Exxon did not submit an EoI for acquiring
BPCL at the close of the deadline on November 16, 2020.
However, several top oil producers from the Middle East and Russia's Rosneft were said to be interested in BPCL which would give the buyer access to over 14 percent of India's oil refining capacity and 23 percent fuel market share. But they hadn't submitted any bids. Industry sources said it was possible that one of the global oil majors or a Middle East oil producer may be teaming up with the investment funds already in the race.
Ambani's
Reliance Industries Ltd and
Adani group are "extremely unlikely" to join the race, a source said. Steel magnate Lakshmi N Mittal, who runs an oil refinery in Punjab in a joint venture with
Hindustan Petroleum Corporation Ltd, was considered a potential candidate but sources said he was not interested in BPCL whose acquisition will cost nearly Rs 80,000 crore at the current market trading price.
The document showed financial bids will be called after submission of the asset valuation report and business valuation report by Asset Valuer and Transaction Advisor respectively. Reserve price will be fixed thereafter and price bids will be opened after that.
If its bid is accepted, the bidder quoting the highest price will be called to the executive share purchase agreement and make payment. Open offers required under the extant guidelines/approvals shall follow, it said.
BPCL owns 35.30 million tonne of oil refining capacity spread over three refineries at Mumbai, Kochi in Kerala and Bina in Madhya Pradesh. It has 18,768 petrol pumps and 6,169 LPG distributors.
