Govt to invite bids for advisors in IBP disinvestment

The equity held by IBP in Balmer Lawrie and Numaligarh Refinery would be transferred before disinvestment of the government holding in IBP, as per the terms and conditions specified in the offer document. IBP has three joint ventures and a subsidiary, Balmer Lawrie & Co Limited.

The advisor’s brief would be to advise and assist the government in the disinvestment of IBP shares. It would also cover assessment and valuation of ibp besides suggesting measures for enhancing sale value. The advisor would also assist the government in preparing a detailed information memorandum, marketing of the offer, inviting and evaluating the bids and involve itself in the negotiations with the prospective buyers. Those wanting to bid for appointment as advisor would have to submit "expression of interest" (EOI) by November 16, 2000.

The bidders would be required to deposit along with their EOIs, a non-refundable earnest fee of Rs 20,000 (approx $ 435), with the government of India having the sole right to accept or reject the same.

The advisor will have to help the government find bidders for IBP equity meeting norms. As per the existing norms, the marketing rights for petroleum products are given in the private sector to only those companies which own and operate a minimum of 3 million tonnes per annum with minimum investment of Rs 2000 crore.

IBP shares, to the extent of 59.6 per cent, are held by the government while the remaining shares are held by the employees and others including public financial instutions.

The invitation of the EOIs comes in the wake of Centre’s disinvestment plans in the petroleum sector, outlined by the Hydrocarbon Vision 2025.

As per the centre’s directive only those companies which invest or propose to invest Rs 2,000 crore in exploration and production or in a refinery would qualify for IBP takeover.

IBP commands 8 per cent of market share in India with a network of 1,500 retail outlets, spread mostly in northern region.

The government has decided to de-link IBP with Balmer Lawrie and then ask other oil majors like Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) to pick up stake in the company.

International oil majors from UK, Canada, Indonesia, Singapore and Indian oil companies like Reliance, Essar and Mangalore Refineries and Petrochemicals Ltd (MRPL) along with the Indian Oil Corporation (IOC), HPCL and BPCL are expected to bid for IBP.