Govt sets aside resistance on HPCL disinvestment

Setting aside resistance from the petroleum ministry, the government on Thursday decided to go ahead with the due diligence of Hindustan Petroleum Corporation Ltd (HPCL). Though the Petroleum Minister Ram Naik had written to the Disinvestment Minister Arun Shourie stating that the process should be delayed till the Supreme Court announces its verdict on September 1, Reliance Industries has started the process of due diligence on Thursday.

Sources in the petroleum industry confirmed that Reliance Industries has started the preliminary work for the due diligence. As part of the due diligence, every bidder will be allowed to visit the company’s refineries besides the data room. They will also be allowed to visit 20 per cent of the retail outlets and depots.

The government plans to disinvest 34.01 per cent government equity to a strategic partner in HPCL. Another 5 per cent stake would be offered to employees at concessional rates. Post disinvestment government’s stake would be reduced to 12 per cent. It has mandated HSBC as global advisor for its stake sale in the country’s second largest refining and marketing company, HPCL.

However, the process was challenged through a public interest litigation (PIL) in the Supreme Court filed by the unions in the petroleum sector. The hearing on this case is scheduled for September 1. Naik had written to the disinvestment ministry stating that it would not be proper to begin the due diligence of HPCL till the Supreme Court gives its verdict on the issue.