Govt’s BPCL bid doc allows employees to take part. But there’s a clause

New Delhi: The government has invited both domestic and global entities with a minimum net worth of $10 billion to bid for BPCL (Bharat Petroleum Corporation Limited) and has released a PIM (Preliminary Information Memorandum) for interested players on Saturday. The EoI (Expression of Interest) document was earlier supposed to be out in January but was held up at Alternative Mechanism-level.

The BPCL PIM bars PSUs from putting in a bid

In keeping with what the government had reiterated time and again earlier, PSUs will not be allowed to bid for BPCL. "CPSEs and central government-owned cooperative societies (i.e. where government ownership is 51 percent or more) are not eligible to participate in the Proposed Transaction. In a consortium, each consortium member must have a minimum Net Worth of $1 billion (United States Dollar one billion)," the BPCL PIM said. However, industry experts have said that PSUs may be able to throw their rings in the hat as part of a consortium, where they are not a lead member.

Can BPCL employees form a company and submit an EoI?

On the issue of allowing the management and the employees of BPCL to submit a bid for the state-run company, the BPCL PIM says, "Management/employees of BPCL, who intend to participate in the Proposed Transaction will be considered in accordance with the guidelines issued by DIPAM as per Annexure XI. Such employees will have to incorporate a company which only can submit the EOI, either itself as a Sole IP or as a member of a consortium. Such a company must satisfy the minimum net worth criteria as specified in clause 5.2.1 for a single entity and as per clause 5.2.2 in case of a consortium, as the case may be. The net worth shall be assessed on the basis of practising CA's certificate not older than 3 months from the date of invitation of EOI,"

Timelines

The last date of submission of written queries on BPCL PIM is April 4. And the last date for submission of EoIs is May 2. "The Government of India ("GoI") is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 1,14,91,83,592 equity shares, which constitutes 52.98 percent of BPCL's equity share capital ("Stake") along with transfer of management control to a strategic buyer [except BPCL's equity shareholding of 61.65% in Numaligarh Refinery Limited ("NRL")]. GoI has appointed Deloitte Touche Tohmatsu India LLP ("DTTILLP"), as its Transaction Advisor ("TA") to advise and manage the strategic disinvestment process," said the document.