Essar, IOC, ONGC in Haldia Petro race

Essar has written to WBIDC regarding stake sale process of HPL, seeking more clarity

Ahead of the filing of a formal Expression of Interest (EoI), at least three companies — Essar, Indian Oil and Oil & Natural Gas Corp — have formally evinced interest for the Bengal government’s stake in Haldia Petrochemicals Ltd (HPL).

A top official of the West Bengal Industrial Development Corporation (WBIDC) said Essar had written to it on the sale process, seeking more clarity. The West Bengal government has around 40 per cent stake, via WBIDC, in HPL and this is for sale. Deloitte has been hired as transactional advisor for valuation of HPL's shares. The final date for filing an EoI is Monday.

“Essar is the new name that is keen to participate. They are likely to place the bid on the last day,” the official said, requesting anonymity. When asked, the company replied, “We would not like to offer any comments on market speculations.”

The official said Reliance Industries had earlier expressed interest, but through an informal communication. “They are yet to write to us officially,” he added.

Indian Oil Corporation (IOC) remains the company with the most expressed interest. “They have written to us and their team has also visited the plant. They are more than keen to buy the state's stake in HPL, as they also have a refinery in the adjacent area,” the official added. IOC already has an 8.9 per cent stake in the company. ONGC is equally keen, it appears.

“It has been witnessed earlier also that bids are submitted officially on the final day,” added the official.

HPL, however, is embroiled in legal issues. The state government has not been on good terms with the other key promoter, The Chatterjee Group (TCG). The latter had recently issued a newspaper advertisement, warning probable investors about the risks in the stake purchase. Both promoters were at loggerheads over a disputed 155 million shares, core to the control of the company. Even after the bidding, the first right of refusal would still be with the Purnendu Chatterjee-led TCG.

“The recent (court) judgment was in the state's favour and this (the dispute) will not deter investors from buying the shares, as this can turn out to be a real smart buy, keeping in mind the forward integration benefit most of the bidders will have,” the source said.