The chairman of Vedanta Resources, Anil Agarwal, said the government has decided not to proceed with the privatization plan of Bharat Petroleum Corporation Ltd (BPCL) and has told her suitors that it will review the plan and come to market.
Among the companies to be divested this year, there are three companies on the table: Bharat Petroleum Corporation Ltd (BPCL), RINL and Pawan Hans.
Speaking about the status of BPCL’s divestiture, Agarwal said in an interview with Moneycontrol: “It will not happen. They have said they have withdrawn the offer, they will come back with a new strategy.”
“Generally speaking, they have made a statement, they are not going ahead. Not in this format,” Agarwal said.
The government has made no official statement as to whether the plan in its current form has been scrapped.
The central government had a plan to sell its entire 53 percent stake in BPCL to private players in 2021-2022, but after delays, this target was shifted to 2022-2023. Vedanta Group, Apollo Global Management and private equity major I Squared Capital-backed Think Gas were the buyers who expressed interest.
Recently, Finance Minister Bhagwat Karad told the Rajya Sabha that the divestment process of oil marketing company Bharat Petroleum Corporation Ltd (BPCL) has reached its second stage and many Expressions of Interest (EoI) have been received regarding the transition.
The government is selling its entire 52.98 percent stake in BPCL for which three expressions of interest (EoIs) have been received, including one from billionaire Anil Agarwal-led Vedanta Group. Financial offers have yet to be submitted.
At the current market price, the 52.98 percent stake is valued at around Rs 45,000 crore. The government invited bidders to express interest in the sale of BPCL in March 2020 and at least three bids had been received by November 2020.
The central government has a divestment target of Rs 65,000 crore for the current fiscal year 2022-23, according to Union budget documents. For the 2021-22 fiscal year, it had set a divestment target of Rs 1.75 lakh crore in last year’s budget. Out of this, only Rs 78,000 crore could be made, a reduction of 55.4 percent.
In last year’s 2021 budget speech, Finance Minister Nirmala Sitharaman had said: “We have retained four strategic areas where the bare minimum of CPSEs [central public sector enterprises] will be maintained and the rest will be privatized.”
The government is expected to complete the sale of ailing helicopter operator Pawan Hans on Saturday and bids have been received from JSW Steel and Jindal Steel & Power Ltd (JSPL), according to a media report citing sources. The divestment of Pawan Hans Hans is estimated at Rs 300-350 crore.
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