Vedanta puts $12 billion price tag on Bharat Petroleum

Vedanta Group is ready to spend $12 billion to acquire India’s state-owned refiner Bharat Petroleum Corp., one of the country’s largest asset sales and which has faced delays in completion. “We are not going to make an aggressive bid, but we will put the right price,” billionaire President Anil Agarwal said in an interview in Riyadh on Wednesday. “The company’s market cap is around $11-12 billion, so that’s the amount of investment we’re looking at.”

India’s plan to privatize BPCL has run into tough terms, with bidders struggling to find partners and spread their financial risk for the costly acquisition. The country expected global oil majors to partner with investment funds to participate in the sale. But some bidders are struggling to invest because of global sustainability rules that prevent them from investing heavily in fossil fuels.

The sale, potentially the biggest privatization in the country, is crucial for the government as it needs to raise revenue for its spending programs. It has already missed the September deadline to complete the sale of its entire 53% stake in BPCL, the country’s second largest state refiner. The current market capitalization of the company is approximately 848.27 billion rupees ($11.4 billion).

The commodities tycoon expects India to open bids for BPCL in March. Besides Vedanta Group, private equity firms Apollo Global Management and I Squared Capital have also shown interest in acquiring the state’s stake in the oil refiner.

“We have a deal with the people, everyone will put money in as the deal is done,” Agarwal said, adding that his company has partnered with Centricus Asset Management Ltd., based in London, to create a $10 billion war chest to buy assets. which the Indian government wants out, including a stake in Shipping Corp. of India.

Eleanor C. William