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Money > Business Headlines > Report April 29, 2002 | 1130 IST |
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Videocon plans to bid for HPCL, BPCLS Ravindran & Reeba Zachariah The Videocon group is planning to bid for the government's stake in Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The government, which holds 51 per cent in HPCL and 66.3 per cent in BPCL, is planning to divest a further 25 per cent in both the companies this fiscal. V N Dhoot, chairman of group flagship Videocon International said, "We are evaluating both the possibilities and will eventually bid for one. The bid will be submitted through Videocon Petroleum, the group's oil company. We are also talking to foreign partners for a possible tie-up." Videocon Petroleum is wholly owned company of the Dhoot family and is into oil exploration. The Dhoots are planning to dilute their stake to 70 per cent in Videocon Petroleum through a $200 million American depository receipt issue. The float is slated for August this year and roadshows are due to begin shortly. "We will use the proceeds of this issue to part fund the acquisition. The balance will be brought in by the foreign partner and through debt," Dhoot said. The prospective bid for the oil PSUs is a part of the group's decision to focus on oil. If the bid goes through Videocon Petroleum will emerge as an integrated oil company with a presence in both upstream and downstream sectors. At present the company is engaged in oil exploration in the Krishna-Godavari Offshore 6 block near Kakinada in Andhra Pradesh. Apart from bidding for the oil majors, Videocon is also planning to throw its hat into the ring for new exploration blocks which will be thrown open to the private sector under the new energy licensing policy. The Rs 40 billion Videocon group, which is predominantly focused on consumer durables, has now shifted its focus to oil as it feels that there is a negative sentiment towards investments in the durables sector. On the other hand, the outlook towards investment in oil sector has turned positive with the dismantling of the administered pricing mechanism which marks decontrol and the transition towards a market-driven pricing mechanism. The Videocon group is in the fray for another divestment as it has submitted an expression of interest for acquiring a 51 per cent stake in the Shipping Corporation of India. ALSO READ:
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