Privatisation-bound Bharat Petroleum Corporation Ltd (BPCL) on Wednesday said it will buyout Oman Oil Company's shares in the Bina refinery project for about Rs 2,400 crore.
In a stock exchange filing, BPCL said it has "finalised commercial terms in connection with the purchase of the 88.86 crore equity shares of Bharat Oman Refineries Limited (BORL), constituting 36.62 per cent of the equity share capital from OQ S.A.0.C. (formerly known as Oman Oil Company S.A.0.C.) for a consideration of approx Rs 2,399.26 crore".
The transaction, it said, is subject to the execution of the relevant transaction documentation and other conditions agreed upon among the parties.
"Upon completion, BPCL will hold 100 per cent of the equity share capital in BORL," it said.
On Tuesday, BPCL Director (Finance) N Vijayagopal had said that discussions with OQ S.A.O.C. had concluded.
BORL was incorporated in February 1994 to build a refinery at Bina in Madhya Pradesh. The unit initially could turn 6 million tonnes of crude oil annually into fuel, which was subsequently raised to 7.8 million tonnes.
Before the company is privatised, BPCL will exit Numaligarh Refinery Ltd (NRL) by selling its 61.65 per cent stake to a consortium of Oil India Ltd and Engineers India Ltd, Vijayagopal had said.
It is selling stake because the government had as per the Assam Peace Accord agreed to keep NRL in the public sector.
"The consortium of OIL and Engineers India Ltd will acquire 49 per cent and the rest 13.65 per cent will be sold to the government of Assam," he had said.
OIL currently holds 26 per cent equity in NRL, while the government of Assam has around 12.35 per cent.
The value for 61.65 per cent stake in NRL is reportedly around Rs 7,000 crore.
Post NRL sale, BPCL would be left with three refineries at Mumbai, Kochi in Kerala and Bina.
The government is selling its entire 52.98 per cent stake in BPCL in the nation's biggest privatisation till date.
Vedanta Group and private equity firms Apollo Global and I Squared Capital's Indian unit Think Gas have put in an expression of interest for buying the government stake.
The sale of NRL is the first step towards the disinvestment of BPCL.
The government has already indicated that it expects to complete BPCL privatisation by the first half of the fiscal beginning April (2021-22).
The sale is key to achieving the Rs 1.75 lakh crore disinvestment target set for 2021-22.
BPCL will give the buyer ownership of around 15.33 per cent of India's oil refining capacity and 22 per cent of the fuel marketing share.