BPCL, state-owned, has offered a voluntary retirement scheme (VRS) to its employees before the government privatizes the country's third-biggest oil refiner and second-largest fuel retailer.
It is the corporation’s decision to offer a Voluntary Retirement Scheme (VRS), with the purpose of enabling employees, who cannot continue the service in the Corporation due to various personal reasons, to request for grant of voluntary retirement from the services of the Corporation, as stated in an internal notice to the employees issued by Bharat Petroleum Corp Ltd (BPCL).
The ‘Bharat Petroleum Voluntary Retirement Scheme - 2020 (BPVRS-2020)’ was opened on 23rd July and will be closed on 13th August.
The VRS will offer an exit option to any employee or officer who dies not wish to work under a private management.
A senior company official said that the employees may feel that their role, position, or place of posting will change once BPCL is privatized. So this scheme comes as an exit option for them.
The government is selling its entire 52.98% stake in BPCL. It has about 20,000 employees.
The official added, it is expected that 5 to 10% of the employees will opt for VRS.
Expressions of Interest (EoI) for buying BPCL are due on 31st July.
As per the VRS notice accessed by PTI, the employees who are above the age of 45 years will be eligible for the scheme.
Active sportspersons (employees recruited as sportspersons and are yet to be deployed in the mainstream) and board-level executives are excluded from the scheme.
The employees who opt for VRS will receive a compensation payment equal to a salary of 2 months for each completed year of service or the monthly salary at the time of voluntary retirement multiplied by the balance months of service left before the normal date of retirement on superannuation, whichever is less.
Repatriation expenses, as payable in case of retirement, will also be paid. Employees opting for voluntary retirement will be given medical benefits under the Post-Retirement Medical Benefits Scheme.
They would also be eligible for encashment of leaves including casual, earned, and privilege leaves.
The employees opting for VRS will neither be eligible for employment in the company's joint ventures nor be engaged as retainers/consultants/advisors. Further, any person facing disciplinary action will not be eligible for the scheme.
The buyers will get ready access to 15.3% of India’s oil refining capacity and 22% of the fuel market share in the world’s fastest-growing energy market.
The market capitalization of BPCL is around Rs 97,247 crore and the government stake is worth over Rs 51,500 crore at current prices. The successful bidder will also be making an open offer to other shareholders for acquiring another 26% at the acquisition price.
Privatization of BPCL is necessary to meet the record Rs 2.1 lakh crore target set by the finance minister from disinvestment proceeds in the budget for 2020-21.
BPCL has 4 refineries- Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh), and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15.3% of India's total refining capacity of 249.8 million tonnes.
The Numaligarh refinery will be carved out of BPCL and sold to a PSU, the new buyer of the company will get 35.3 million tonnes of refining capacity. BPCL also owns about 16,309 petrol pumps and 6,113 LPG (liquefied petroleum gas) distributor agencies in the country. BPCL also has 51 LPG bottling plants.
The company distributes 22% of petroleum products consumed in the country by volume as of March this year and has more than a 5th of the 256 aviation fuel stations in India. Deloitte Touche Tohmatsu India LLP has been appointed as its transaction advisor for the strategic disinvestment process by the Government.
Strategic disinvestment has been proposed by the Government of the entire shareholding in BPCL consisting of 114.91 crore equity shares, which constitutes 52.98% of BPCL's equity share capital, along with transfer of management control to a strategic buyer (except BPCL's equity shareholding of 61.65% in Numaligarh Refinery Ltd).
The bidding will be a two-stage affair, the bidders qualifying the 1st EOI phase will be asked to make a financial bid in the second round.
Public sector undertakings (PSUs) have been made ineligible to participate in the privatization.
Any private company with a net worth of USD 10 billion can participate in the bidding and a consortium of not more than four firms will be allowed to bid.
As per the bidding criteria, the lead member of the consortium needs to hold a 40% stake and others must have a minimum net worth of USD 1 billion. Changes in the consortium can be made within 45 days, but the lead member cannot be changed.