Govt Not To Go Ahead With Current Plan; To Draw New Strategy, Says Anil Agarwal

Vedanta Resources Chairman Anil Agarwal said the government has decided not to go ahead with the Bharat Petroleum Corporation Ltd (BPCL) privatization plan and told its suitors it will review the plan and go public.

Among the companies to be divested this year, three companies on the table are Bharat Petroleum Corporation Ltd (BPCL), RINL and Pawan Hans.

On the status of the BPCL divestment, Agarwal in an interview with Money control said: “It will not happen. They have said that they have withdrawn the offer, they will come back with a new strategy.”

“Generally they have given a statement, they are not going forward. Not in this format,” Agarwal said.

The government has not officially made a statement as to whether the plan has been abandoned in its current form.

The central government had a plan to sell its entire 53 per cent stake in BPCL to private players in 2021-22, but after delays, this target was changed to 2022-23. Vedanta Group, Apollo Global Management and major private equity firm Think Gas, backed by I Squared Capital, were the buyers showing interest.

Recently, Minister of State for Finance Bhagwat Karad told Rajya Sabha that the divestment process of the oil trading company Bharat Petroleum Corporation Ltd (BPCL) has reached the second stage and many expressions of interest have been received (EoI ) regarding their transition.

The government is selling its entire 52.98 percent stake in BPCL, for which three expressions of interest (EoI) have been received, including one from the Vedanta group led by billionaire Anil Agarwal. Financial offers have not yet been invited.

At the current market price, the 52.98 per cent stake is valued at around Rs 45,000 crore. The government invited bidders to express interest in selling BPCL in March 2020 and by November 2020 at least three offers had come in.

The central government has a divestment target of Rs 65 billion for the current fiscal year 2022-23, according to union budget documents. For the fiscal year 2021-22, it had set a divestment target of Rs 1.75 lakh crore in last year’s budget. Of this, only Rs 78,000 crore could be achieved, a reduction of 55.4 per cent.

In the previous year’s 2021 budget speech, Finance Minister Nirmala Sitharaman said: “We have kept four areas that are strategic where the minimum CPSE [central public sector enterprises] it will be maintained and the rest will be privatized”.

The government is expected to finalize the sale of ailing helicopter operator Pawan Hans on Saturday and offers have been received from JSW Steel and Jindal Steel & Power Ltd (JSPL), according to a press report citing sources. Pawan Hans Hans’s divestment is estimated to reach Rs 300-350 crore.