Bharat Petroleum Corporation (BPCL) has agreed to sell its entire 61.65% stake in Numaligarh Refinery (NRL) to a consortium of Oil India (OIL) and Engineers India (EIL), as well as the Assam government, for nearly Rs. 9,876 crore. The sale of Numaligarh Refinery, Ltd. clears the way for the privatization of India’s second-largest fuel retailer. The group of the two companies would be the buyer if the State Government, which owns 12.35% of NRL and has the right of the first bid, agrees not to purchase the shares being offloaded.
The Central Government agreed to retain NRL in the public sector in compliance with the Assam Peace Agreement. BPCL was forced to sell its entire 61.65% stake to state-owned companies as part of this contract. After a consortium of OIL, EIL., and the Government of Assam expressed interest in purchasing the stake, the BPCL board approved the sale on Monday. The company said that the board of directors of BPCL approved the proposal for selling the entire equity shares of Rs. 445.4 crores owned by BPCL in NRL to a consortium of OIL and EIL and the Government of Assam at a meeting held on March 1, 2021, in a filing to the stock exchanges.
The total sum to be paid will be Rs 9,876 crore. The consortium of OIL and EIL is expected to buy 49%, with the remaining 13.65% going to the Assam Government. In Assam, NRL runs a 3-million-tonne-per-year oil refinery. OIL currently owns 26% of NRL, with the government of Assam holding the remaining 12.35%.
After BPCL shareholders approve the stake sale, a share purchase agreement with the buyers will be signed. BPCL told the stock exchange on Monday that the transaction is expected to be completed within a month of receiving all required approvals. The move is notable because the Centre had agreed to delink NRL ahead of BPCL’s planned divestiture. In 2019-2020, NRL’s consolidated total income was Rs. 14,244.29 crores or 4.29% of BPCL’s consolidated total income. NRL had a combined net worth of Rs. 5,292 crores as of March 31, 2020, which was 14.18% of BPCL’s consolidated net worth.
Last month, BPCL agreed to pay Rs. 2,400 crore for Oman Oil Company’s shares in the Bina refinery project in the run-up to the privatization. Bharat Oman Refineries, Ltd. (BORL) owns 63.68% of BPCL and developed and operates a 7.8 million tonne oil refinery in Bina… It will pay Rs 2,399.2 crore to OQ S.A.0.C. for 36.62% of the equity share capital.
