BPCL Trust to sell up to 2% stake to employees through new mechanism

To decide on residual 7.33 per cent stake in due course

As part of its divestment process, state-run refiner Bharat Petroleum Corporation (BPCL)’s board on Friday approved a scheme to sell certain shares from the BCPL Trust of Investment in Shares, to its employees through a new trust mechanism. According to people in the know, upto 2 per cent stake will be offered to employees at a discounted price.

BPCL Trust for Investment in Shares at present holds around 9.33 per cent stake of BPCL’s paid up share capital. There has been speculation on what happens to this stake in the wake of the planned divestment process. “The company has now decided to offer upto 2 per cent of the paid-up capital of the company from this Trust to employees under the scheme approved on Friday. The government gave a go ahead for the same yesterday,” said a person privy to the development on condition of anonymity. ”The company is yet to decide what to do with the residual 7.33 per cent stake held by the trust,” the person added.

BPCL Trust for Investment in Shares is an independent entity, of which the company, BPCL, is a beneficiary.

In a statement to BSE on Friday, BPCL said it had approved a proposed Employee Stock Purchase Scheme (ESPS) for the specified employees through the Trust mechanism.  “Forming a new a trust to execute the sale is a SEBI requirement,” the person added. The company will seek shareholders’ approval for the scheme at its upcoming annual general meeting (AGM) later this month.

The statement added, “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 shares will be offered to eligible employees at a discounted price of around one-third of the six-month trading price average, people in the know added. “The discount definitely is at a cost to the company which is the beneficiary of the trust,” they said. On Friday, BPCL closed at Rs 403.40 per share on the BSE.

Earlier, BPCL also offered a voluntary retirement scheme (VRS) to some of its employees as part of steps taken towards the planned divestment. The central government is looking to privatise the state refiner through sale of its majority stake. At present, the central government holds 52.98 per cent stake in the company.