BPCL to reward employees before privatisation; to offer stock options at one-third market price

By: |
September 5, 2020 1:06 PM

Ahead of its looming privatisation, state-owned Bharat Petroleum Corp Ltd (BPCL) has decided to offer its employees stock options at one-third of the market price.

"The PSU company looks to reward staff before it’s stakes are offloaded by the government to a private player.

Ahead of its looming privatisation, state-owned Bharat Petroleum Corp Ltd (BPCL) has decided to offer its employees stock options at one-third of the market price. The PSU company looks to reward staff before it’s stakes are offloaded by the government to a private player. On Friday, the board “approved the proposed Employee Stock Purchase Scheme (ESPS) to the specified employees through the trust mechanism, subject to the approval of the shareholders”, it said in a regulatory filing, without divulging more details. “BPCL Trust for Investment in Shares’ holds around 9.33% stake of the company’s paid-up share capital,” PTI reported a source as saying. 

Of the total 9.33% stake, 2% will be offered to employees at one-third the price of BPCL scrip in the preceding six months. However, this will not impact the government’s shareholding in the PSU which holds more than half the stake in the company. The government looks to offload all of its 52.98% stake in BPCL to a strategic investor. BPCL is one of the key entities in the government’s Rs 2.1 lakh crore divestment target for the current fiscal.The Expression of Interest (EoI) for the privatisation is due on 30th September 2020. 

“The Trust formed for the purpose shall purchase the aforesaid shares from the ‘BPCL Trust for Investment in Shares’ by way of secondary acquisition through the stock exchanges as per the SEBI (Share Based Employee Benefits) Regulations, 2014 and other applicable laws,” the company said. Meanwhile, the number of shares on offer under the ESPS will depend on the grade of the employee, the agency cited a source as saying. Directors on the company board will also be eligible for the offer.

Under the ESPS, the shares will be under one-year lock-in period. The company is yet to decide upon the fortune of the residual 7.33% stake held by the Trust, which is an independent entity, of which the company BPCL is a beneficiary. BPCL closed at Rs 403.40 per share on the BSE on Friday.

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