The government will provide guidance on employee protection, asset stripping and business continuity in Bharat Petroleum Corp Ltd (BPCL) to potential acquirers of the company only at a later stage of bidding, according to privatisation rules issued by the disinvestment department.
The government is selling its entire 52.98 per cent stake in the country’s second-largest fuel retailer and third-biggest oil refiner.
Preliminary expressions of interest (EoIs) are due on September 30, which will be followed by qualified bidders being asked to submit financial or price bids.
The department of investment and public asset management (Dipam) has issued clarifications on queries raised by potential bidders for the government stake in BPCL.
On a query on restrictions relating to employee protection, asset stripping, business continuity and lock-in of shares, Dipam said, “This information shall be provided to the qualified interested parties (QIPs) in the RFP/ SPA (request for proposal/share purchase agreement).”
Labour laws are said to be one of the many considerations that will guide bids, particularly those from foreign firms. A potential acquirer of BPCL may want to shed excess workforce as well as strip some of the non-essential assets such as land and buildings.
BPCL will give the acquirer access to 15.33 per cent of India’s oil refining limit and a 22 per cent market share in the world’s fastest-growing fuel market.
While the acquirer of government stake will have to make the mandatory open offer to buy 26 per cent from minority shareholders of BPCL on the same terms, the government advised the bidders to consult their legal counsels on the issue of such offers becoming mandatory for listed entities where BPCL may hold a stake.