Bharat Petroleum Privatization On Track, Lots Of Private Firms Interested To Buy Stake
During the second quarter of FY20, Bharat Petroleum Corporation Ltd (BPCL) is expected to make a significant improvement in gross refining margin (GRM).
Unlock Tremendous Value Through Privatisation
“This (privatization) is expected to unlock tremendous value through the sharpening of professionalism, improvement in efficiencies, increased investments, access to advanced technologies and newer global markets and product diversification, thus propelling future growth,” said K Padmakar, the BPCL chairman to the stakeholders.
Moving ahead, the top management said that all the queries asked by potential bidders have been answered.
As lots of big bidders had raised a lot of operational queries to the management due to diligence for the disinvestment.
From the earlier declaration, the government is planning the sale of its 53.29 percent stake in BPCL in this fiscal year ending March 2021.
Out of the 9 percent treasury stocks, 2 percent of them will be transferred to a new trust for ESOPs.
The plan is to give these ESOPs to the employees at a deep discount.
While the remaining is expected to be sold as a block deal, which will be decided by October 15.
BPCL trust holds 9.33% post-merger of Kochi refinery with BPCL currently.
Here it is important to understand that BPCL can’t keep treasury shares and it is a prerequisite condition before the BPCL stake sale under the new Companies Act.
BPCL June Quarter Results
Prior to this, the state-owned oil marketing company (OMC) posted a GRM of $0.39 per barrel in the quarter ending June 2020, which is far away from the $2.81 per barrel in the year-ago period.
Further, BPCL had revealed a profit of Rs 2,076 crore in spite of GRM being low on the back of inventory gains from a revival in the price of crude oil from lows of around $20 per barrel in April.
Now petrol sales have reached pre-COVID levels and diesel sales are expected to reach near pre-COVID levels in two-three months according to BPCL executives.
Prior to this, the ‘Bharat Petroleum Voluntary Retirement Scheme – 2020 (BPVRS-2020)’ opened on July 23 and closed on August 13 before the commencement of its disinvestment process.