BPCL may use proceeds from NRL deal to fund acquisition of Oman’s stake in Bina Refinery

BPCL will also be paying a dividend to shareholders after the completion of NRL deal.
Bharat Petroleum Disinvestment

State-run Bharat Petroleum Corporation (BPCL) will use the proceeds from its stake sale in Numaligarh Refinery (NRL) to partly fund the acquisition of Oman Oil Company’s shares worth Rs 2,400 crore in Bina Refinery in Madhya Pradesh, which is expected to happen this month.

The company will also be paying a dividend to shareholders after the completion of the NRL deal.

On the other hand, BPCL is expected to sign a sale and purchase agreement on NRL with a consortium of Oil India (OIL), Engineers India (EIL) and the Government of Assam by March 27.

“An extraordinary general meeting of shareholders will be held on March 25, and we will complete the transaction on the same day. A sale and purchase agreement may be signed by March 26 or 27,” said N Vijayagopal, Director (Finance) of BPCL.

Out of the total 61.65 percent stake that the consortium will be picking up – the Assam government will get 13.65 percent, EIL 4.37 percent and the remaining 43.63 percent will go to OIL. On March 1, the BPCL board had cleared the bids submitted by the consortium that valued NRL’s 61.65 percent at Rs 9,875.96 crore.

“Out of the proceeds that we get from the deal, shareholders will be rewarded in the form of a dividend, a portion will go as capital gains tax, and we will also use some part to complete the Rs 2,400 crore Oman transaction,” Vijayagopal added.

If the Government of Assam is unable to pick up the entire 13.65 percent, that part will also go to OIL. The Oman deal is also expected to happen before March 31.

BPCL holds a 63.68 percent stake in the 7.8 million tonne (MT) Bharat Oman Refineries Ltd (BORL), while OQ (formerly known as Oman Oil Company) holds 36.62 percent. Both these deals are considered to be the initial steps towards the privatisation of BPCL. “We are ready with the data room and are waiting for the DIPAM’s instruction for qualified bidders. They expect the process to be over by the first quarter of the next financial year,” he added.

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