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BPCL Privatisation: Govt seeks global bidders with $10 bn networth

The EoI submissions can be made till May 2, whereas investor queries will be entertained till April 4

Saturday March 7, 2020 11:29 AM, ummid.com with inputs from IANS

BPCL Tender

New Delhi: The Union government has issued a Global Invite for Expression of Interest (EoI) for disinvestment in Bharat Petroleum Corporation Limited (BPCL) from prospective bidders with a minimum net worth of $10 billion as of Saturday.

The EoI submissions can be made till May 2, whereas investor queries will be entertained till April 4.

Another condition pertains to a maximum of four members are permitted in a consortium, and the lead member must hold 40 per cent in proportion. Other members of the consortium must have a minimum $1 billion net worth.

The EOI allows changes in the consortium within 45 days, though the lead member cannot be changed.

The GoI proposes to disinvest its entire shareholding in BPCL comprising 1,14,91,83,592 equity shares held through the Ministry of Petroleum and Natural Gas, which constitutes 52.98 per cent of BPCL's equity share capital, along with the transfer of management control to the strategic buyer (except BPCL's equity shareholding of 61.65 per cent in Numaligarh Refinery Limited (NRL) and management control thereon).

The shareholding of BPCL in NRL will be transferred to a Central Public Sector Enterprise operating in the oil and gas sector under the Ministry and accordingly is not a part of the proposed transaction.

Highest bidder to make 26% open offer

The successful bidder for Bharat Petroleum Corporation Limited (BPCL) privatisation will have to make an open offer to public shareholders to acquire a minimum 26 per cent shares in the public sector company.

The open offer price will be the highest of the negotiated price under an agreement and volume-weighted average price paid by the acquirer and persons acting in concert (PAC) in the 52 weeks preceding the public announcement for open offer.

The open offer price can also be the highest price paid by the acquirer or PAC for any acquisition during the 26 weeks preceding the PA.

Volume Weighted Average Price

The other formula is Volume Weighted Average Price (VWAP) over the 60 trading days prior to the date of the PA (for frequently traded shares), the bid documents said.

The CSB (Confirmed Select Bidder) will not be allowed to make the open offer, conditional on any minimum level of acceptance.

The CSB will be required to put in escrow in cash the entire consideration payable under the open offer, assuming full acceptance of the open offer.

As of December 31, BPCL shareholding includes government of India's 52.98%, BPCL Trust's 9.33%, LIC's 5.84%, FPIs' 14.07%, Mutual Funds' 11.44% and others 6.34%.

BPCL Current Share Price

Acquisition of the majority stake by the bidder would need to comply with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Accordingly, the bidder will need to offer to acquire additional stake from other shareholders via the open offer as per the Takeover Regulations, the bid document said.

On Friday, each BPCL share was priced at Rs 400.80.

The current SEBI norms are that acquisition of an aggregate of 25% or more shares or voting rights in a listed entity would trigger an open offer and also acquisition of control would trigger an open offer. The size is minimum of 26% shares or voting rights of the target company.

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