HPCL sell-off: Oil Ministry wants govt to retain 26% stake

NEW DELHI: The Petroleum Ministry is believed to have expressed the view that the government should retain a minimum of 26 per cent stake in oil refiner Hindustan Petroleum Corporation (HPCL) besides making it mandatory on the strategic partner to complete the Rs 9,500 crore Bhatinda refinery.
In its comments on the Disinvestment Ministry''s proposal to sell 34 per cent stake to a strategic investor, the Petroleum Ministry has opined that a minimum of 26 per cent shareholding was necessary for the government to have its say in crucial decisions impacting consumers, highly placed sources said.
"Suppose the strategic investor wants to close down (HPCL''s) refinery and start importing products from surplus refineries in the South Eastern region, then the government will need 26 per cent equity to block such a move," sources said.
They said the ministry did not agree with the proposal to retain 15 per cent after offloading another 2 per cent to employees.
"A 15 per cent stake would not give government nominee directors enough strength to block resolutions which are against national and consumer interest," sources said.
The ministry also wanted a clause in the shareholders agreement making it mandatory on the strategic investor to complete the 9 million tonne Bhatinda refinery.
Contrary to the Disinvestment Ministry''s proposal, the Petroleum Ministry wants public sector companies to be allowed to bid for HPCL, sources said.
Besides, it wants five per cent government shareholding to be divested to employees at concessional prices as against the Disinvestment Ministry''s proposal of 2 per cent stake for employees.