No decision on stake sale in Petronet, IGL yet: Bharat Petroleum Corporation Ltd
Bharat Petroleum Corporation Ltd (BPCL) on Friday said no decision has yet been taken to sell its stake in Petronet LNG and Indraprastha Gas to help the company’s prospective owner avoid making an open offer for the two gas companies.
V.R.K. Gupta, chief financial officer, BPCL, said market regulator Sebi has not yet responded to an application made to exempt the new owner of BPCL from making an open offer to the shareholders of Petronet and IGL.
BPCL holds 12.5 per cent of the shareholding in liquefied natural gas importer Petronet and a 22.5 per cent stake in city gas retailer Indraprashta Gas Ltd (IGL). It is a promoter of both the listed companies and holds board positions. According to the legal position evaluated by the department of investment and public asset management (Dipam), the acquirer of BPCL will have to make open offers to the minority shareholders of Petronet and IGL for the acquisition of a 26 per cent stake.
The thinking in the government is that the open offers for Petronet and IGL may deter bidders who are mostly eyeing BPCL’s oil refining assets and 22 per cent share of the fuel marketing business it commands, sources said.
In an attempt to bail out the new owner of BPCL from spending an additional Rs 19,100 crore in open offers for firms where it will have no operational control, it was suggested that BPCL sells a part of its shareholding in the two firms and shed promoter status.
“There is no decision taken as on date but we are working with the government to protect the interests of BPCL,” Gupta said at an investor call. BPCL does not want to pare its stake in either IGL or Petronet as it sees it as a value destruction proposition.