NEW DELHI: The government invited initial bids for selling its equity in the cash-rich oil refiner HPCL last week as part of its ambitious privatisation agenda. According to official sources, some of the top oil and petrochemicals companies globally are likely to express interest in acquiring the stake in HPCL, which has a countrywide network of petrol stations. Prominent among the overseas companies likely to join the race include Dutch oil major Royal Dutch Shell, Kuwait Petroleum, Saudi Aramco and Malaysia's Petronas, the sources said. "The bidding process of HPCL is expected to be very exciting with all the big names from different parts of the world firming up plans to join the race," a top official source told IANS. "At this stage we have no reason to believe that the threats issued by trade unions against the privatisation of HPCL is going to dampen the sentiment of the overseas companies," the source added. "Most of the potential bidders are planning to enter the growing Indian market through the privatisation of HPCL." Among the Indian companies, Reliance Industries, the country's largest oil and petrochemicals firm, is expected to be one of the most aggressive bidders for the government's stake. The government would accept bids from interested companies till March 17. As per the rules, the bidder should have a combined net worth higher than 25 billion as well as a good track record in the oil and petrochemicals sector. New Delhi, which holds a 51 percent stake in HPCL, has decided to sell a controlling 34 percent stake in India's second largest refining and retailing company. Even as the government has started the HPCL sell-off exercise, employees of state-run oil firms have threatened to block the privatisation by going on strike and not allowing bidders to conduct due-diligence exercise at the company's installations. Disinvestment Minister Arun Shourie has said any strike by oil sector workers to oppose the sale would hurt the valuation of HPCL. The government had postponed the sell-off process of HPCL and another state-run oil firm, Bharat Petroleum Corporation Ltd. (BPCL), for three months in September in the face of intense political squabbling. It found common ground on its stalled privatisation programme two days before the end of three-month moratorium period to decide the stake sale of HPCL and BPCL, which together control 40 percent of India's two million barrel-a-day oil market. The market value of HPCL and BPCL shares had dropped over 30 percent in September after Petroleum Minister Ram Naik and Defence Minister George Fernandes forced through the three-month delay in selling stakes. India's privatisation drive, projected as the cornerstone of the reforms programme, has repeatedly come under attacks in recent months, with the ruling coalition's allies demanding review of the divestment agenda. The government raised 48 billion selling state-run companies in April to October this year, less than half of the 120-billion target set for the year to March 2003. Share of HPCL was up 0.2 percent at 315.70 and BPCL was 1.5 percent higher at 210.75 on the Bombay Stock Exchange in the intra-day trade Wednesday. The stocks of two companies has staged a smart rally in the last one week's trade on hopes that the government would manage to raise huge revenue with the privatisation of these two public sector firms.
Source: IANS