The divestment ministry is understood to have suggested sale of 26 per cent equity in oil public sector unit Hindustan Petroleum Corporation Ltd to a strategic investor and a public offer for 25 per cent equity in Bharat Petroleum Corporation Ltd.
In a note circulated among ministries for the next meeting of the Cabinet Committee on Divestment, it has proposed to cut down government stake in HPCL to 22 per cent after divestment from the present level of 51 per cent.
For this, the note suggests earmarking three per cent equity for employees in HPCL, whose proposed privatisation had evoked sharp reactions from opposition parties in Parliament and prompted Divestment Minister Arun Shourie to seek opinion from the Attorney General on the legal aspects of divestment in companies acquired through Acts of Parliament.
Only after obtaining the opinion from Attorney General, the government is likely to finalise the date for CCD to take a final decision on quantum of divestment in the two oil PSUs, as also the eligibility of bidders, sources said adding that ministry officials had met the AG last evening for a discussion.
In case of BPCL, employees would be offered five per cent stake that would bring down the government stake from current 66 per cent to 26 per cent.
Sources
Divestment ministry is of the view that the sale of equity in two oil PSUs was not constrained by the nationalisation Acts of Parliament as they were being operated under the Companies Act.
Successive governments had reduced government holding from 100 per cent to 51 per cent in case of HPCL and 66 per cent in BPCL without approaching Parliament.
Besides deciding on the eligibility of suitors for HPCL, the CCD was also likely to take a view on who would qualify for picking government stake in BPCL, sources said.
It is also likely to deliberate on requests of state-run Oil and Natural Gas Corporation and fertiliser cooperatives Iffco-Kribhco to be allowed to bid for HPCL.
The CCD had in September decided to bar all PSUs from the government's divestment process. In special cases, administrative ministries were asked to make cases for allowing certain PSUs in the bidding process.
The race for HPCL, which has oil refineries at Mumbai and Vizag and a 20 per cent retail market share with over 4500 retail outlets, is likely to be keenly contested with likes of Royal Dutch Shell, Kuwait Petroleum Corporation, BP, Petronas and Reliance Industries expected to bid.
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