Mining conglomerate Vedanta has put in a preliminary expression of interest (EoI) for buying the government’s stake in Bharat Petroleum Corp Ltd (BPCL), for which a major foreign player too is said to be in race.
A special purpose vehicle floated by the BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources submitted an EoI before the close of deadline on November 16.
“Vedanta’s EoI for BPCL is to evaluate potential synergies with our existing oil and gas business,” the company said in a statement. “The EoI is at a preliminary stage and exploratory in nature.”
Sources in the department handling the sale said the EoI has been put in by a special purpose vehicle or SPV floated by Vedanta Ltd and Vedanta Resources.
They also stated that a major foreign player was among the three-four entities whose EoIs were received by the close of the bidding on November 16.
The other potential investors are foreign funds but their identity was not immediately disclosed.
The government is selling its entire 52.98 per cent stake in India’s second largest fuel retailer as part of plans to raise a record Rs 2.1 lakh crore from disinvestment proceeds in 2020-21 (April 2020 to March 2021).
But share price of BPCL has plunged by nearly a fourth since the time the strategic sale was approved in November last year.
At Wednesday’s closing price of Rs 383.20 on BSE, the government’s 52.98 per cent stake in BPCL is worth just over Rs 44,000 crore. Also, the acquirer would have to make an open offer for buying another 26 per cent stake from the public, which would cost about Rs 21,600 crore.
Vedanta’s interest in BPCL stems from its USD 8.67 billion acquisition of oil producer Cairn India nearly a decade back.
The company produces oil from oilfields in Rajasthan which are used in refineries such as those operated by BPCL to turn them into petrol, diesel and other fuels.
The government had at the close of bidding stated that “multiple”
EoIs had been received. It, however, did not reveal the identity of the bidders.
Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), which is handling the strategic sale, had tweeted on November 16 that the transaction advisors for the sale of government’s 52.98 per cent stake in BPCL have reported receiving “multiple expressions of interest.”
“The transaction will move to the second stage after scrutiny by TA,” he had said. TA stands for transaction advisor.