'Clean Data Room' with sensitive info on BPCL to open for bidders signing additional pact

Bidders vying to buy government stake in Bharat Petroleum Corporation Ltd (BPCL) will be given access to a 'Clean Data Room' containing commercially sensitive information on the firm subject to their signing an additional confidentiality agreement, sources said.

A virtual data room, mostly containing financial information on BPCL, was opened in the second week of April and qualified bidders signing Confidentiality Undertaking (CU) have been given access, three sources with direct knowledge of the matter said.

Bidders which include mining-to-oil conglomerate Vedanta and private equity firms Apollo Global and I Squared Capital's arm Think Gas will also be allowed physical inspection of assets such as refineries and depots in the coming weeks as part of the due diligence process.

The government will seek financial bids once bidders complete due diligence and terms and conditions of the share purchase agreement (SPA) are negotiated.

Sources said certain data which is commercially sensitive will be uploaded in a separate section of the data room referred to as 'Clean Data Room' and access shall be extended only to the designated team of lawyers of the qualified bidders in the interest of confidentiality and prevention of misuse of data.

A separate agreement restricting use of the data and maintaining confidentiality will have to be signed by the bidders for accessing the 'Clean Data Room', they said.

The data room access for due diligence is likely to be available for a period of around 8 weeks.

As part of the due diligence process, the bidders want to undertake a physical visit to some of the major sites like refineries and depots/plants.

While BPCL will facilitate such visits, an approval from the Ministry of External Affairs (MEA) is required in case any foreign passport holder wants to visit sensitive locations like refineries, sources said.

Also, representatives of bidders would be allowed to hold virtual meetings with management of BPCL once the silence period till the announcement of annual financial results of the company for 2020-21 are announced.

All queries raised by the bidders during the due diligence are being collated by the transaction advisor, Deloitte and they will be answered by the company management or the concerned government department depending on the nature of the issue, sources said.

The government's 52.98 per cent stake in BPCL is valued at about Rs 53,000 crore based on Friday's closing price of company shares on BPCL.

The stake sale in India's second-largest fuel retailer is crucial to plans to raise a record Rs 1.75 lakh crore from disinvestment proceeds in fiscal 2021-22 (April 2021 to March 2022).

Sources said the recent Covid-19 outbreak could still slow down the sale process as physical visits may be hindered.

A special purpose vehicle floated by the BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources Plc submitted an expression of interest (EoI) for buying government stake in BPCL before the close of the deadline on November 16, 2020.

While I Squared Capital is a private equity firm focusing on global infrastructure investments, New York-based Apollo Global Management, Inc is a global alternative investment manager firm.

I Squared Capital invests in energy, utilities, transport and telecom projects in North America, Europe and select high growth economies such as India and China.

Vedanta's interest in BPCL stems from its $8.67 billion acquisition of oil producer Cairn India nearly a decade back. The company produces oil from oilfields in Rajasthan which are used in refineries such as those operated by BPCL to turn them into petrol, diesel and other fuels.

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.

The buyer of the company will get 35.3 million tonnes of refining capacity -- 12 million tonne Mumbai unit, 15.5 million tonne Kochi refinery and 7.8 million tonne Bina unit.

BPCL also owns 18,639 petrol pumps, 6,166 LPG distributor agencies and 61 out of 260 aviation fuel stations in the country.

The firm also has upstream presence with 26 assets in nine countries such as Russia, Brazil, Mozambique, the UAE, Indonesia, Australia, East Timor, Israel and India. It is also making a foray into city gas distribution and has licences for 37 geographical areas (GAs).