BPCL Plans Big Hike In Share Capital

NEW DELHI: If BPCL has its way, its authorised share capital may see a quantum jump from Rs 450 crore to Rs 2,500 crore. The company has sought the government’s approval for the same, which is intended to strengthen the company’s balancesheet and help it raise debt for its future projects.

Confirming the move, a BPCL official said: “There is a need for increasing its authorised share capital as there is very little scope for expansion of capital base. The company has applied to the government seeking approval for increasing the share capital to Rs 2,500 crore and the response is awaited.”

The issued share capital of BPCL has been raised recently to Rs 361.54 crore from Rs 300 crore. Currently, the government holds 54.93% stake in the company. About 9.33% equity stake is held by the BPCL Trust. Together, the government and the trust hold a 64.26% equity stake in BPCL. About 30.68% stake in the company is held by domestic and foreign financial institutions, state governments, mutual funds and insurance companies. Other public shareholding in the company is about 5.07%.

The enhanced authorised share capital would help the company in its ambitious growth plan. Recently, the company announced its proposal of forming a joint venture with the US-based Matrix Marine Fuels LLC in Singapore for ratcheting up its bunkering business. BPCL would have 50% equity stake in the company.

Besides focusing on its core business of fuel retail, BPCL is actively involved in exploration and production (E&P) of hydrocarbon. It has been awarded blocks in the sixth round of the new exploration licensing policy (NELP-VI) and is also pursuing E&P activities abroad. Its wholly-owned subsidiary Bharat PetroResources and Videocon Industries together signed an agreement with EnCana Corporation, Canada, and 749793 Alberta to buy shares of EnCana Brasil Petroleo Limitada, Brazil.

The transaction is for ten deep water offshore exploration blocks in Brazil. BPCL has also signed a farm-in agreement for acquiring participating interest in the North Sea (in the UK) blocks — 48/1b and 48/2c. Its partners in the consortium are Encore (NNS) and Encore Petroleum (25%), NWE Southern Cross UK (25%), Tata Petrodyne (25%). BPCL is having a 25% participating interest in the project. The operator of the project is Encore.