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“The SPV can be formed at any time after submission of expression of interest (EoI) but prior to signing of the SPA. Both the interested party (IP) and the SPV will have to sign the SPA in case IP is selected as the strategic investor,” the department of investment and public asset management (Dipam) said in a pre-bid clarification issued on Friday. Earlier, the IPs were given a week to create the SPV.
In another clarification, the government said it will consider the consolidated net worth of a bidder including that of its parent if a bidder has placed the bid on the basis of its parent.
“…for avoidance of doubt, it is clarified that the net worth of an IP will be considered on a consolidated basis. And if an IP is found to be satisfying net worth criteria on the basis of its parent’s net worth, the consolidated net worth of its parent will be considered,” the clarification said.
Also, in case of consolidated financials, non-controlling interest (NCI) shall be included in determining consolidated net worth. The initial eligibility criteria of a bidder or a consortium of not more than four firms, to have net worth of $10 billion remains unchanged.
Further, interested parties that evince interest in bidding for BPCL would be required to take necessary security clearance at the request for proposal (RFP) stage, instead of applying for security clearance at the time of submission of financial bids.
The government has also clarified that if bids from entities in a jurisdiction outside India are considered, “it should not be construed as approval from the Government of India on any tax issues relating to foreign investments in India that may arise in relation to the Proposed Transaction.”
Bidders have to comply with relevant tax laws and procedures, it added.
Dipam has extended the deadline for submitting bids till September 30 for the sale of the government’s entire 52.98% stake in BPCL, including management control. The sale will not include BPCL’s equity shareholding of 61.65% in Numaligarh Refinery.
The government has set a disinvestment target of Rs 2.1 lakh crore for FY 2020-21. Of this, Rs 1.2 lakh crore is expected to come from disinvestment of public sector undertakings and Rs 90,000 crore from sale of stake in financial institutions.
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4 Comments on this Story
Kuriakose Mathew51 days ago
very good wait and see and public can only watch
Nikesh51 days ago
By net worth criteria even others can bid. Tata, birla, Bajaj or even many congress leader as their net worth is sufficient. No body will bid and when given to highest bidder , goverment will be criticized. People want goverment to do business, render services , collect taxes, enact law, implement law everything. When any private business house want to do any legitimate business , he is hated. People always think that business man are all fraud. But no one understand that economic systems is collectively run by business man when they take risk, put their money, take risk of getting money from public, rewarding share holders, paying taxes and providing employment. They are not like we people who just make useless comments with out having any basis knowledge of commerce and economics. No economy of the world is entirely run by giverment . People have to contribute either as business man or as employee. Goverment can not provide employment to 130 cr people.
Ravi Bhat52 days ago
why such long drawn out process, when eventually it will be given to Ambani or Adani