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DoD for 26 p.c. equity sale in HPCL to strategic partner

NEW DELHI DEC. 17. The Disinvestment Ministry is understood to have suggested sale of 26 per cent equity in oil PSE Hindustan Petroleum Corporation Ltd. (HPCL) to a strategic investor and a public offer for 35 per cent equity in Bharat Petroleum Corporation.

In a note circulated among ministries for the next meeting of the Cabinet Committee on Disinvestment, it has proposed to cut down the Government stake in HPCL to 22 per cent after divestment from the present level of 51 per cent.

For this, the note suggests earmarking 3 per cent equity for employees in HPCL, whose proposed privatisation had evoked sharp reactions from Ppposition parties in Parliament and prompted the Disinvestment Minister, Arun Shourie, to seek opinion from the Attorney General on the legal aspects of divestment in companies acquired through Acts of Parliament.

Only after obtaining the opinion from the AG, the Government is likely to finalise the date for CCD to take a final decision on the quantum of divestment in the two oil PSEs as also the eligibility of bidders, sources said adding that ministry officials had met the AG last evening for a discussion.

In case of BPCL, employees would be offered 5 per cent stake that would bring down the Government stake from the current 66 per cent to 26 per cent.

Sources said the dates for CCD would be decided after obtaining legal opinion of the AG.

The Disinvestment Ministry is of the view that the sale of equity in two oil PSEs was not constrained by the nationalisation Acts of Parliament as they were being operated under the Companies Act.

Successive governments had reduced the Government holding from 100 per cent to 51 per cent in case of HPCL and 66 per cent in BPCL without approaching Parliament.

Besides deciding on the eligibility of suitors for HPCL, the CCD was also likely to take a view on who would qualify for picking up Government stake in BPCL, sources said.

It is also likely to deliberate on requests of state-run Oil and Natural Gas Corporation and fertilizer cooperatives Iffco-Kribhco to be allowed to bid for HPCL.

The CCD had in September decided to bar all public sector companies from the Government's disinvestment process. In special cases, administrative ministries were asked to make cases for allowing certain PSEs in the bidding process.

The race for HPCL is likely to be keenly contested with likes of Royal Dutch Shell, Kuwait Petroleum Corporation, BP, Petronas and Reliance Industries expected to bid. — PTI

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