The Hindu : Govt. stops HPCL, BPCL disinvestment process

Online edition of India's National Newspaper
Wednesday, Sep 17, 2003

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Govt. stops HPCL, BPCL disinvestment process

By Our Special Correspondent

NEW DELHI SEPT. 16. Soon after the Supreme Court judgement today, the Government has ordered a stop to the disinvestment process of the Hindustan Petroleum Corporation Limited (HPCL) and the Bharat Petroleum Corporation Limited (BPCL).

The due diligence (checking of books of accounts and other documents) of HPCL was underway since August 28. The Government had decided to offload 34.01 per cent of its current holding of 51 per cent equity in the company to a strategic partner and Reliance, British Petroleum, Kuwait Petroleum, Petronas of Malaysia, Shell-Saudi Armco combine and Essar Oil were the interested parties for HPCL's equity since management control was to be handed over to the successful bidder.

HPCL has a retail-marketing outlet of 4,849 petrol pumps in the country, which the private and foreign oil companies were keenly eyeing since the private sector, and foreign companies have now been allowed to operate in the retail petroleum market. The existing retail network would have saved the successful bidder substantial investments in creating a fresh marketing network countrywide.

In BPCL, where the Government holds 66.20 per cent equity, the plan was to sell 10 per cent equity in the domestic market through a public issue and another 25 per cent through American Depository Receipts (ADRs).

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