The government on May 26 said it has called off the current process for inviting expression of interests (EOIs) for the strategic disinvestment of Bharat Petroleum Corporation Ltd (BPCL).
The plan to offload stake in the state-run oil refinery has not been chalked off, as the government said it would re-initiate the process in "due course based on review of the situation".
The current EOI process has been called off as majority of BPCL suitors "expressed their inability to continue", the Department of Investment and Public Asset Management (DIPAM) said in a statement.
The process to invite EOIs was initiated by DIPAM in March 2020, days before the COVID-19 outbreak was declared as a pandemic. The Centre had planned to offload l,14,91,83,592 equity shares or 52.9 percent stake in BPCL.
Despite the COVID-19 disruption, multiple EOIs were received, DIPAM said, adding that qualified interested parties (QIPs) "had initiated due diligence on the company".
"However, the multiple COVID-19 waves and geo-political conditions affected multiple industries globally, particularly oil and gas industry. Owing to prevailing conditions in the global energy market, the majority of QIPs have expressed their inability to continue in the current process of disinvestment of BPCL," the statement added.
In view of the prevailing scenario, the Alternative Mechanism - headed by the Empowered Group of Ministers which is tasked with the privatisation plans - decided to call off the process and "the EoIs received from QIPs shall stand cancelled", DIPAM further stated.
The statement comes around a month after Anil Agarwal, chairman of Vedanta Resources, told Moneycontrol in an exclusive interview that the government has decided not to go ahead with the disinvestment in BPCL for now.
“It will not happen. They've said that they have withdrawn the offer, they will come back with a new strategy," Agarwal had said.
Over the past few months, the BPCL divestment plan had left investors and the industry baffled about what to expect. As recently as March-end, Minister of State for Finance Bhagwat Karad told the Rajya Sabha that the divestment process was in a second stage and had received "multiple" EOIs but there were media reports citing senior bureaucrats that said that the divestment had slowed down as investors were keener on green projects.
In February, Minister of Petroleum and Natural Gas Hardeep Singh Puri had said that the government "hopes to replicate the success of Air India divestment in the BPCL divestment."
The Air India divestment was also marred by delays, but was eventually completed on January 27 this year, around three months after the Tata Group emerged as the winner among those who placed bids for the takeover for the loss-incurring national carrier.
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