The government hopes the proposed public offer by Bharat Petroleum Corporation Ltd will hit the markets by February 2004, according to a schedule worked out by the ministries concerned.

A government official said BPCL and Hindustan Petroleum Corporation Ltd would be divested by the last quarter of 2003-04.

He said there were no instructions to go slow on the divestment of the two companies and work was proceeding on the assumption that Parliament had no objection to the sale.

The official added that the meeting of the inter-ministerial group to appoint global advisers for the public issue would be held this Friday.

At current estimates, the divestment in the two companies should yield a minimum of Rs 18,000 crore (Rs 180 billion). The official said a deal with the strategic buyer for HPCL should be over by March 2004.

The Centre had postponed discussions with potential bidders for HPCL and BPCL in April because officials of several financial conglomerates based in Sars-hit Hong Kong and Singapore were unable to travel.

The official pointed out that the eight-month period till February for the BPCL public offer was necessary because every stage of the selloff process required clearances from the committee of secretaries and the inter-ministerial group.

The divestment ministry expects to complete due diligence for HPCL by the end of August. The official said the ministry was also firming up legal documents and other necessary details for the HPCL selloff.

The due diligence exercise, involving site visits and access to the data room, will help bidders submit their technical bids.

In the case of BPCL, the ministry hopes to appoint by the middle of June an adviser for piloting its public offer.

The government, which holds 51.01 per cent stake in HPCL, will offer a 34.01 per cent stake with management control to a strategic investor.

Post-divestment, the Centre's stake in HPCL will come down to 12 per cent, with 5 per cent being offered to the employees.

The preliminary information memorandum issued by the divestment ministry on February 7 had set a minimum net worth of Rs 2,500 crore (Rs 25 billion) for HPCL bidders.

Reliance Industries, Essar and several global majors, including Royal Dutch Shell, Kuwait Petroleum, Saudi Aramco, TotalFina and Chevron Texaco, had submitted expressions of interest for buying the 34.01 per cent stake in HPCL.

The government now holds 66.2 per cent in BPCL, and hopes to divest about 38.2 per cent through domestic and international public offers. Post-divestment, its stake will fall to below 26 per cent, and BPCL will cease to be a government company.