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BPCL sale: Anil Agarwal's Vedanta in talks with banks to raise $8 billion

BusinessToday.In     December 16, 2020

After showing interest in state-owned Bharat Petroleum Corp Ltd (BPCL), Anil Agarwal-led Vedanta group now plans to raise about $8 billion in debt and equity to secure its acquisition. Mining-to-oil conglomerate Vedanta Resources Plc has already started talks with banks and discussions with JP Morgan are at an advanced stage, LiveMint reported citing people familiar with talks.

Vedanta had put forward an "exploratory" preliminary expression of interest for buying a 52.98 per cent stake in BPCL. "Vedanta's EoI for BPCL is to evaluate potential synergies with our existing oil and gas business," a company spokesperson said.

Analysts see Vedanta's interest in BPCL stems from its $8.67 billion worth acquisition of oil producer Cairn India around 10 years back. Cairn India produces oil from oil fields in Rajasthan. The oil is used in refineries including those operated by BPCL to produce petrol, diesel and other fuels. The acquisition of BPCL is expected to provide a boost to the company's expansion plans in India.

However, the asking price of close to $10 billion by the government for selling its entire 52.98 per cent stake could act as a deterrent in its sale as the biggest players in the oil business have stayed away, say analysts. The BPCL is being sold at a time when the world is moving away from conventional fuel, and many countries have set ambitious targets to adopt electric mobility in the years to come.

Meanwhile, a high-powered committee evaluated preliminary bids from Vedanta and other two private equity firms Apollo Global and I Squared Capital's arm Think Gas on Tuesday, PTI reported. The government also held discussions on the BPCL valuation process and setting of the reserve price last week. It also assessed transaction advisor Deloitte's report on these three bids.

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 management firm. Last month, the government, at the close of bidding, had stated that "multiple" EoIs had been received for BPCL.

Also read: BPCL bid evaluation committee to meet today; Vedanta, Apollo Global in fray


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