Covid forces govt to further extend bid deadline for BPCL stake sale

The finance ministry on Wednesday announced a further extension of the deadline for submission of bids for the sale of its stake in oil refiner Bharat Petroleum Corp Ltd (BPCL) from 1 July to 30 September, giving more time for investors hit by the slump caused by the coronavirus (Covid-19) pandemic.

It was extended “in view of further requests from the interested bidders and the prevailing situation arising out of Covid-19,” the finance ministry said in a statement.
BPCL was one of the high value public sector enterprises that the government had put out for privatisation and was expected to garner more than Rs50,000 crore, considering the market value of the government’s 52.98 per cent stake in the company.
BPCL has a market capitalisation of about Rs97,247 crore and the government stake at current prices is worth over Rs51,500 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the acquisition price.
Global oil majors like Aramco, Rosneft, Adnoc among others have shown interest in acquiring BPCL. However, the spread of Covid-19 has brought uncertainty among investors making the sale of a profit-making government PSU also difficult.
India has the world’s third-highest number of coronavirus infections after the United States and Brazil, and lockdown imposed in March, although partly eased of late, continues to constrain economic activity.
The government’s move to sell its 52.98 per cent stake in Bharat Petroleum, the country’s second-biggest oil refiner, could help it bridge its widening fiscal gap. Oil minister Dharmendra Pradhan said last November that international energy firms were set to take part in the bidding process.