Clear statement emerges on sale of HPCL and BPCL
AT LAST we have some good news for companies interested in the government's decision to sell part of its stake in Hindustan and Bharat Petroleum.
In an unprecedented meeting on 26th January - India's Republic Day and a Sunday (!) - the powerful Cabinet Committee on Disinvestment agreed to begin the privatisation of bothstate-owned refiners immediately. Sunday's meeting was a clear signal that prime minister Atal Bihari Vajpayee, with support from disinvestment minister Arun Shourie, is determined to pursue privatisation despite entrenched opposition from oil minister Ram Naik and others in the cabinet.
"We will start work this week itself," disinvestment secretary Pradip Baijal tells PETROWATCH. Yet Baijal is unwilling to set a timetable.
"There cannot be a time-table. It all depends on what kind of roadblocks come in the way." Of one thing Baijal is sure: nothing will happen before the end of the financial year in March.
However, another disinvestment ministry source tells PETROWATCH that HPCL and BPCL will be "out of government hands in eight to 12 months from now. According to the cabinet decision, HPCL will be sold to a 'Strategic Investor (whatever that means!) while a majority of BPCL's shares will be sold to stock market investors, both Indian and foreign.
The government holds 51.01% of HPCL; 5% of this will be sold to employees; 34.01% will be sold to the 'strategic' investor; and 12% will be left for the government. At BPCL, the government holds 66.2%; 5% will be sold to employees; 35.2% to stock market investors and 26% will stay with the government.