The Government has called off the strategic disinvestment of oil marketing company, Bharat Petroleum (BPCL) citing lack of bidders’ interest. This is third strategic disinvestment which has been called off or put on hold in the current fiscal, reported Hindu Business Line.
Government owns 52.98 per cent in the company and wanted to sell entire stake along with management control.
In an update, Department of Investment and Public Asset Management (DIPAM) said: “Based on the decisions of the Alternative Mechanism (empowered group of ministers), Government of India has decided to call off the present EoI (expression of interest) process for strategic disinvestment of BPCL, and the EoIs received from QIP (qualified interested arties) shall stand cancelled.” Further, it said that decision on the re-initiation of the process will be taken in due course based on review of situations.
The Government on November 20, 2019, gave in-principle approval for strategic disinvestment of Government’s shareholding in BPCL excluding BPCL’s shareholding in Numaligarh Refinery (NRL).
Upshot of COVID, Geo-political conditions
DIPAM says multiple EoIs received and they also initiated due diligence of the company. However, "the multiple Covid-19 waves and geo-political conditions affected multiple industries globally, particularly oil and gas industry. Owing to prevailing conditions in the global energy market, most of the QIPs have expressed their inability to continue in the current process of disinvestment of BPCL,” DIPAM explained for reasons to call off.
There are unconfirmed reports that just one QIP left in the fray and the government did not want to take any chance, so it preferred to call off.
BPCL has already sold entire Investment in Equity Shares of Numaligarh Refinery have been sold to a consortium of Oil India and Engineers India; and to Government of Assam during FY 2020-21 at a total consideration of ₹9,875.96 crores.
The growth of the BPCL, post-disinvestment, would be able to generate higher economic activity including growth of the ancillary industries and creation of new job opportunities.
The resources unlocked by the strategic disinvestment of BPCL would be used to finance the social sector/developmental programmes of the Government benefiting the public, they had claimed.