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Cabinet to decide on BPCL IPO before selloff

The Union Cabinet will shortly decide whether an initial public offering of equity shares should precede the strategic sale in the state-run refiner Bharat Petroleum Corporation Ltd, Petroleum Minister Ram Naik said on Wednesday.

"The issue is with the Cabinet and it will take a decision soon," Naik told reporters on the sidelines of the launch of high-performance petrol at a BPCL outlet in New Delhi.

Declining to elaborate, Naik said the Cabinet would soon decide between issuing 50 million fresh equity shares -- a Cabinet note for which has been circulated -- and sale of government stake to a strategic partner.

While the petroleum ministry is pitching for an IPO prior to divestment with a view to garnering resources for funding the expansion projects and bringing down debt-equity ratio, the divestment ministry is moving the Cabinet with a proposal for sale of government equity to private sector and leaving the decision of raising resources on the strategic partner.

Asked if Prime Minister Atal Bihari Vajpayee has given him a time to make presentation on the need for BPCL's proposed IPO before divestment, Naik said, "He (the prime minister) has to decide on that (the time)."

Stating that no date has been fixed for the next meeting of the Cabinet Committee on Divestment, Naik refused to comment on the reported move by the divestment ministry to bar all public sector undertakings from bidding for BPCL and HPCL.

"All that will be discussed at the (Cabinet) meeting," he said.

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