Stake sale in HPCL : Government appoints HSBC as global advisor
19 March 2003
Mumbai: The Indian government has appointed HSBC as its global advisor for selling 34-per cent stake in Hindustan Petroleum Corporation (HPCL). HSBC will advice the government to shortlist bidders and to examine technical and financial bids of interested parties.
The government has also received bids from the world's largest oil group, Royal Dutch Shell, to acquire the government's stake in the public sector oil refiner.
Sources close to the development say the world's largest oil and gas company by reserves and production, Saudi Aramco, too, has submitted an express of interest (EoI). Reliance Industries, Kuwait Petroleum Corporation and Petronas of Malaysia are also believed to have submitted preliminary bids for acquisition of management control along with the government stake in HPCL on 17 March 2003, the last date for submitting EoIs.
The government is in the process of offloading about 34-per cent stake of its 51 per cent in HPCL, and another 5-per cent stake will be offered to employees at concessional rates. Post-disinvestment, the government's stake will be reduced to 12 per cent.
At present, the government holds 51.01-per cent stake in HPCL with the remaining distributed between banks and financial institutions (23.22 per cent), foreign institutional investors and overseas corporate bodies (11.05 per cent), mutual funds (3.92 per cent) and others including employees (10.8 per cent).
The government has fixed a minimum net worth of Rs 2,500 crore for companies bidding for HPCL. According to the preliminary information memorandum issued by the disinvestment ministry, the net worth criteria will be applicable to individual companies as well as consortiums submitting EoIs.
The memorandum also said the strategic partner might be required to make an open offer to acquire the government's shares in HPCL in accordance with the terms of the takeover code. Sources have indicated that the government has fixed a six-to-eight-month time frame for the completion of HPCL's disinvestment process.