New Delhi: K Padmakar, the Chairman and Managing Director (CMD) of disinvestment-bound Bharat Petroleum Corporation Ltd (BPCL), said on Monday that the privatisation of the company will unlock "tremendous" value for the oil PSU by way of increased investment and introduction of technology. "This (privatisation) is expected to unlock tremendous value through sharpening of professionalism, improvement in efficiencies, increased investments, access to advanced technologies and newer global markets and product diversification, thus propelling future growth," Padmakar told shareholders on Monday at the company's annual general meeting.
The statement comes as the government is aiming to sell its 53.29 percent stake in BPCL by the end of March 2021. However, the plan has been progressing far too slow in view of the COVID-19 situation. The deadline for submission of Expression of Interest (EoI) is set to expire on September 30. And sources, who spoke to PSU Watch on the condition of anonymity, have said that the deadline is set to be extended once again.
Addressing the press after the AGM, the BPCL CMD said that the company paid USD 54 million on behalf of its bankrupt partner Videocon group in its Brazilian joint venture (JV) to defend the asset and to follow the law of the land. Padmakar added that the move has increased BPCL's stake in the JV to over 54.5 percent now.
"We made the payment of USD 53.98 million on behalf of Videocon's share of cost to protect our interests and the assets which are very valuable and also not to make the JV a defaulter under Brazilian law. The payment was also to protect the interest of lenders. With this investment our stake in the JV has gone up to 54.5 per cent and that we will continue to increase our stake in the joint venture as we move forward," said the BPCL CMD.
Commenting on the number of employees seeking Voluntary Retirement Scheme (VRS) ahead of divestment, the BPCL CMD said as many as 1,100 have opted for retirement, bringing down the overall staff strength to 10,000 now. He also added that the 8 percent treasury shares held through employees trusts will not be part of divestment and can neither be offloaded through an OFS route as it is below 10 percent. "It can be sold only through a block deal on the exchanges," he said.
Padmakar said that during the June quarter of FY21, BPCL spent over Rs 2,100 crore on capex. Earlier this year, BPCL had scaled down its FY21 capex to Rs 8,000 crore from Rs 12,500 crore due to the COVID-19 pandemic. Commenting on the demand situation, the BPCL CMD said that while petrol demand gas reached pre-COVID level, demand for diesel remained 8-9 percent lower. While stating that the demand for diesel may improve a bit, Padmakar said that it will remain in the red.
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