BPCL said that with the acquisition of OQ’s entire stake, BPCL will establish full control over BORL
The consolidation exercise comes as the government is set to privatise BPCL
Mumbai: Disinvestment-bound Bharat Petroleum Corporation Limited (BPCL), the second largest oil marketing company in India, has signed a Sale Purchase Agreement (SPA) on Wednesday with OQ, an integrated energy company in Oman, for the purchase of their entire stake in Bharat Oman Refineries Company Ltd (BORL), the 7.8 MMTPA capacity central India refinery, located at Bina in Madhya Pradesh. In a regulatory filing, BPCL had earlier said in February that the deal is worth Rs 2,399.26 crore. It had also said that the indicative time period for the completion of the acquisition is March 31.
With the acquisition, BORL is now a wholly owned subsidiary of BPCL. BORL was incorporated in 1994 as a public limited company with equal equity participation of Bharat Petroleum Corporation Limited and OQ (formerly known as OOC). Since March 2020, BPCL has been holding 63.4 percent and OQ 36.6 percent equity in the company. The government of Madhya Pradesh has a minor stake in the company through compulsorily convertible warrants.
BORL acquisition will bring synergy, optimise returns: BPCL Director Finance
Commenting on the occasion, N. Vijayagopal, Director (Finance) of BPCL said, “With the acquisition of OQ’s entire stake in BORL, BPCL will establish control over BORL. This is expected to bring immense advantages to both the companies in terms of synergies and optimisation of returns and will facilitate any future expansion or diversification in Bina.”
The consolidation exercise comes as the government is set to privatise BPCL by selling its stake to a strategic player. The government has also said that it is hopeful about completing the privatisation of BPCL in the first half of the next financial year. After a year marred by the COVID-19 pandemic, the Centre is looking to raise Rs 1.75 lakh crore from disinvestment in FY22. Disinvestment of PSUs like BPCL, Air India, CONCOR, SCI are some of the major plans that will account for a large chunk of the overall disinvestment target.
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