Companies including Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co. are likely to bid for the government’s stake in Bharat Petroleum Corp. Ltd (BPCL), two people aware of the matter told Mint, as global energy majors look to tap the world’s fastest-growing major oil market.
The proceeds from the sale will be crucial for the government to contain its fiscal deficit and to meet at least a third of its Rs 1.05 trillion disinvestment target, the report said.
The companies are likely to bid for the government’s 53.3% stake in state-run BPCL either on their own or as part of a consortium, the report added.
BPCL, set up in the 1920s as Burmah Shell, an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India), was nationalised in 1976.
The Atal Bihari Vajpayee government had made a similar attempt to privatise BPCL in 2003, but in vain as the Supreme Court ruled that the move needed parliamentary approval. To clear the way for privatisation this time around, the Narendra Modi government has repealed the law concerned altogether.
The government had earlier sold its stake in Hindustan Petroleum Corp. Ltd to state-run Oil and Natural Gas Corp. Ltd at a roughly 18% premium to prevailing prices. Analysts told Mint that the premium can be much higher in the case of privatisation.
Separately, the Indian owner of Marriott-operated hotels is set to buy Accor Hotel's Novotel in Pune for an estimated Rs 290 crore ($41 million at current exchange rate), people in the know told Business Standard, as K Raheja Group’s Chalet Hotels seeks to expand beyond Mumbai, Bengaluru, and Hyderabad.
Chalet plans to add more rooms and turn around the 250-room property in Pune’s Viman Nagar, which is not functioning at its best. The deal, if it goes through, will mark the first acquisition by the Mumbai-based firm.
Meanwhile, Sunrise Foods, Kolkata-based maker of packaged spices, has begun groundwork for a strategic sale that could see its promoters dilute majority stake in the company, persons in the know told Business Standard.
The promoters, which is the Sharma family from Kolkata, may also choose to exit the firm altogether, the persons added, depending on the contours of the deal.
The promoter family is eyeing a valuation of Rs 2,500 crore ($352.6 million at current exchange rate).
“The promoters may exit completely or hold a minority stake and subsequently exit over the next few years. The promoters probably feel they have achieved what they could and it is time to hand over the reins to a player with deeper pockets,” an official privy to the development said.
The company reported net sales of over Rs 400 crore and a net profit of Rs 41.5 crore during the year ended March 31, 2018.