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BPCL launches block deal to raise around Rs 3,700 crore; may soon take a call on special dividend

Recently, in a move considered as a first step towards its divestment, BPCL approved the sale of the firm's holding in the Numaligarh Refinery for Rs 9,878 crore.

March 08, 2021 / 09:35 PM IST
The government plans to conclude the strategic sale of BPCL in the June quarter.

The government plans to conclude the strategic sale of BPCL in the June quarter.

 
 
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The country’s second biggest state refiner Bharat Petroleum Corporation (BPCL), which is one of the key divestment candidates of the government, launched a block deal on March 8 to sell up to 4 percent of its treasury shares worth Rs 3,700 crore, sources with the knowledge of the matter told CNBC Awaaz.

According to the term sheet of the deal, reviewed by CNBC Awaaz, BPCL has set a floor price of Rs 435 per share for the proposed transaction which is at a 7 percent discount to the closing price on March 8, 2021.

To be sure, around 9 percent of the equity shares of BPCL were created as treasury shares post the 2013 merger of the refiner with state-run Kochi Refinery. Two percent of those treasury shares were earmarked for the employees benefit trust, leaving behind a kitty of 7 percent shares.

“As of now, the block deal is for 4 percent of the shares, but based on market demand, the size may be hiked to 7 percent. The situation is fluid as of now," one of the individuals cited above told CNBC Awaaz.

“Most of the proceeds of the BPCL block deal are likely to be used for a special dividend for shareholders going ahead,” said a second individual.

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“Citi, Kotak and ICICI Securities are the bankers to the block deal," the second individual added.

Both the individuals spoke to CNBC Awaaz on the condition of anonymity. BPCL and the bankers could not be contacted for an immediate comment.

Recently, in a move considered as a first step towards its divestment, BPCL approved the sale of the firm's holding in the Numaligarh Refinery for Rs 9,878 crore.

The government plans to conclude the strategic sale of BPCL in the June quarter, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey had said In February, 2021.

Three preliminary bids have been submitted for buying a controlling stake in BPCL. Back in November, mining-to-oil conglomerate Vedanta had confirmed putting in an expression of interest (EoI) for buying the government's 52.98 percent stake in BPCL. The other two bidders are said to be global funds, one of them being Apollo Global Management.
Yatin Mota
first published: Mar 8, 2021 09:20 pm

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