A large number of workmen have accepted VRS and will leave by end-Sept: BPCL
Employees having a certain length of service depending on their grades will be given BPCL shares at a discounted price.
There have been pockets of resistance to BPCL privatisation at workmen level, but it is localised and not very effective, says N Vijayagopal, Director (Finance).
Has the government done anything to clarify the questions of prospective bidders?
As of now the government has come out with the clarifications on the questions faced by prospective investors in BPCL. The government has published in the website answers to all the questions for prospective bidders including questions on net worth clarifications and such matters.
The government is planning Esops for BPCL employees to incentivise them and reward them. What is the plan later on?
Esop is actually a scheme by which the employees having a certain length of service depending on their grades will be given shares of BPCL at a discounted price, at one-third of the market price of the previous six months’ average. We have certain shares held in a trust which was acquired when we merged the Kochi refinery in 2006. BPCL holds about 9.33% shares in this trust. Out of that, 2% of the paid up capital is being given to the employees at a discount of market price and it will be allotted to the employees after the trust keeps the share for six months. Will non-controlling stakes in some of the joint ventures also be included in this transaction?
New investor in BPCL will get controlling and non-controlling interest which BPCL holds in various of its subsidiaries and joint ventures excluding NRL which is specifically excluded from this transaction.
How are your talks with some of the employee unions progressing? We understand there were some resistance to this plan? Have things smoothened down now?
There have been pockets of resistance at the employees especially at a workmen level, but it is localised and not very effective. We have recently rolled out the VRS plans for those of the employees who may find the new management difficult to handle and we have got a very good response for the VRS scheme. A substantial number of workmen will be probably going out from the company by the end of this month.
We understand that the date has been extended to September 30th but have you had any calls on how assets are operating, etc, with any of the prospective bidders?
Earlier, in the roadshow, we had met potential bidders and some of the questions were collected by us and that was the basis on which the PIM itself was prepared and subsequently the clarifications on PIM has now come out in the DIPAM website. As per the DIPAM procedure, we are not permitted to disclose the names of the potential bidders.
What is the right way to look at the valuations of BPCL?
There is a robust process of valuation. There are very clear guidelines of DIPAM on how the valuation is done and experts for that valuation exercise is already on the job. Either way, valuations are a matter of the way the potential bidders see this because this is an integrated company and there are certain arms of BPCL which will be more attractive from the point of view of bidders. I would not like to comment on what would be a right value for this. We are still awaiting the report of the valuation experts for this.
How are your operations are panning out, especially fuel retailing? What levels have they come back to compared to pre-Covid days? How is the refining capacity in terms of utilisation if you could share the levels?
We have come back not to pre-Covid levels exactly but on the marketing side there is substantial improvement and almost 90% of the sales has been restored. On the diesel side, it is only about 83-84% and therefore our refineries are running at the capacity of more than 80% now. We have seen a sharp recovery on the marketing side. The demand has picked up and it will continue to rise as the situation continues to normalise.