Cabinet approves strategic disinvestment of BPCL. 4 other PSUs

Cabinet approves strategic disinvestment of BPCL. 4 other PSUs

Agency News

New Delhi, Nov 20 : The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi on Wednesday accorded 'in-principle' approval for the strategic disinvestment in five Public Sector companies such as Bharat Petroleum Corporation Ltd (BPCL), Shipping Corp of India (SCI), Container Corp of India(CCI), THDC India and North Eastern Electric Power Corporation Ltd (NEEPCO).

The Cabinet approved a strategic divestment of the government's 53.29 per cent stake in BPCL, along with transfer of certain management control. This is excluding BPCL's equity share holding of 61 per cent stake in Numaligarh Refinery.

The Minister said that the government will sell its stake in THDC India and North Eastern Electric Power Corporation Ltd (NEEPCO) to state-owned NTPC Ltd. As per reports, the government is planning to invite top global oil and gas companies, including Exxon Mobil, Chevron and ConocoPhillips (from the US), Royal Dutch Shell and BP Plc (the UK), Rosneft and LukOil (Russia), Petro China, CNPC and Sinopec (China), Total SA (France) and Saudi Aramco, to bid for its stake in BPCL and ONGC's stake in Hindustan Petroleum Corporation (HPCL).

It also approved the sale of 53.75% of the government holding of 63.75% stake in SCI and 30.9% stake in Concor. The government currently holds 54.80% in the latter.

In a parallel move, the Cabinet has approved reducing the government's stake in select PSUs, such as Indian Oil Corporation (IOC), to below 51% while continuing to retain management control. The management control will continue to be retained with the government after considering equity held by other state-run companies in the divested firm.

The government currently holds 51.5% in IOC and another 25.9% through state-owned Life Insurance Corporation of India (LIC), and explorers Oil & Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) and the government can potentially sell 26.4 per cent for about Rs 33,000 crore.

Sitharaman said Numaligarh Refinery will be handed over to the public sector oil company to allay concerns of the North East over the privatisation move.

"This is intended to widen the bandwidth of disinvestment window in select CPSEs. This will also help in pursuing the objectives of disinvestment i e spreading the wealth of the nation among a greater number of people, promoting efficient management of Government investment in CPSEs and ensuring greater transparency and increasing contribution of the CPSEs towards higher economic growth of the nation, " stated an official release.

"It would also increase the free float available in the market which may have positive impact on Foreign Portfolio Investments in Indian capital markets and in creation of wider investment space for retail and institutional investors and may increase in the market premium of CPSEs due to likely positive investors perception, " it added. (UNI)