Indian Oil Corporation (IOC), one of the contenders for buying a stake in the fuel retail business of Reliance Industries Ltd, has mandated PriceWaterhouse (PW) to carry out the valuation of Reliance’s 1,432 petrol pumps.
IOC chairman and managing director Sarthak Behuria confirmed to Hindustan Times that the company had on Friday submitted a non-binding bid for Reliance’s fuel retail business. “PW has been appointed as the transaction advisor of IOC and will carry out a detailed due diligence of Reliance’s petrol pumps and aviation fuel stations,” he said.
Behuria did not reveal which option IOC has exercised under its bid. One IOC official said, “Under the joint venture (JV), IOC is keen to have a majority stake in the company. We are looking at having the management control in the JV company.”
The other company in the race for Reliance’s fuel retail business is Indian subsidiary of Royal Dutch Shell.
The two other state-owned oil firms to which Reliance made an offer — Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) — did not submit any bids before the cutoff date of March 20.
However, a senior Reliance official said the company has received more than two bids. “We have also got requests from some companies to extend the last date for submitting bids. We may extend the deadline to March 31,” he said.
Reliance, which had kept its petrol pumps shut since last April, is in the re-organising its fuel retail business. It is re-opening its petrol pumps, and has simultaneously floated a “limited tender” seeking bids from select public and private sector oil firms under various options:
* Offering 26 per cent equity
* Forming a 50:50 JV
* Offering upto 74 per cent equity
“We prefer the 50:50 JV where both sides can add value to the business,” the Reliance official said.