The woes of eastern India’s largest petrochemical company Haldia Petrochemicals (HPL), is on a rise as a “forced running” of the plant on a lower capacity is causing a loss of more than Rs 130 crore per month, while Japanese major Toyo Engineering, which looks into the technical aspects, has withdrawn the performance guarantee of the plant
The plant’s capacity utilisation was below 50 per cent for the last two months. According to sources, the state government is forcibly running the plant suffering a loss of more than Rs 130 crore per month, while it could have saved about Rs 90 crore by shutting down the plant.
“Higher naphtha prices, drop in demand and increasing stock are becoming a burden on the company. With Toyo Engineering withdrawing performance guarantee, the group of insurers may now turn more skeptical about the firm,” alleged an official source close to the development.
At the end of the second quarter, the accumulated loss of the petrochemical major stood at Rs 1,800 crore. However, for state government, which is looking to offload its 39.9 per cent stake in HPL, these financial woes are turning out to be the biggest roadblock.
“We are looking for a transaction analyst and The Chatterjee Group will get the first right for refusal, based on the highest price on the bidding process,” said Partha Chatterjee, state industries and commerce minister and the chairman of HPL board. TCG owns around 37 per cent stake in the firm.
“The earning per share of minus 4 (March 2012) and increasing contingent and commitment liabilities, apart from the accumulated loss of Rs 1,800 crore makes the firm less appealing for prospective bidders,” an official added. Major players like MRPL, IOC, Reliance Industries and GAIL were keen on HPL stake.
HPL was looking to raise an additional Rs 1,000 crore credit line for working capital, however lenders were shying away from the firm.
Last year, the Supreme Court had dismissed a petition by the Chatterjee Group, another major shareholder in the company, that challenged a High Court verdict that set aside a CLB directive asking the state government to exit the project by selling its stake to TCG. The disputed shares between both the major shareholders are 155 million.