The privatization was put on hold after two bidders ran into issues like lack of clarity in fuel pricing, with only one bidder left in the fray.
Highlight
- The government on Thursday withdrew its offer to sell its entire 52.98 per cent stake in BPCL.
- Reason: Most of the bidders expressed their inability to participate due to the global energy market.
The government on Thursday withdrew its offer to sell its entire 52.98 per cent stake in BPCL, saying most of the bidders have expressed their inability to participate in the current privatization process due to prevailing conditions in the global energy market.
The government had planned to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Limited (BPCL) and had invited Expression of Interest (EoI) from bidders in March 2020. There were at least three bids till November 2020.
However, the privatization was stalled after two bidders ran into issues like lack of clarity in fuel pricing, with only one bidder left in the fray.
The Department of Investment and Public Asset Management (DIPAM) said that several COVID-19 waves and geopolitical conditions affected industries globally, especially the oil and gas industry.
“Due to the prevailing conditions in the global energy market, most of the QIPs (qualified interested parties) have expressed their inability to continue with the current process of disinvestment of BPCL,” it said.
In view of this, the Group of Ministers on Disinvestment has decided to discontinue the current EOI process for strategic disinvestment of BPCL and the EOI received from the QIP will stand cancelled, Dipam said.
A decision on restarting the strategic disinvestment process of BPCL will be taken at an appropriate time based on a review of the situation.
Mining mogul Anil Agarwal’s Vedanta Group and US venture funds Apollo Global Management Inc and I Squared Capital Advisors had shown interest in buying the government’s 53 per cent stake in BPCL.
But both funds were withdrawn after failing to engage global investors amid declining interest in fossil fuels. The government had not invited financial bids.
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