Haldia Petro might convert Rs 128-cr debt into equity

Mgmt orders statutory audit to find reasons for poor financials

Haldia Petrochemicals Ltd (HPL)’s management is considering converting part of its debt into equity, so that it does not have to turn to the Board for Industrial and Financial Reconstruction for help.  The management has also ordered a statutory audit to find how the company’s financials became such a mess.

The decision on the conversion is expected to be taken in the next meeting on December 24.  

“The probe (audit) will come out with a report within a month. This probe will include many aspects, including the price being paid for buying naphtha,” Partha Chatterjee, Bengal’s industry minister and the company’s chairman, said after the marathon meetng here.

The company might also decide on a rights issue. Lenders had earlier suggested converting the debt of Rs 128 crore but the company turned the proposal down. The company has once earlier converted debt of Rs 127 crore into equity.

For the first time, both the promoters — The Chatterjee Group (TCG) and the West Bengal government — have admitted that the company’s plant, operating at 50-60 per cent of its capacity, is suffering for want of funds.

Said Purnendu Chatterjee, TCG founder and chairman, after the meeting here: “The company is in a very bad situation.”

The HPL chairman said: “The matter is of serious concern and we are considering all options to save the company and gather working capital to increase efficiency of the plant.”

On the recent apex court order allowing TCG to approach the International Court of Arbitration in Paris, the chairman said, “The matter is sub judice, so I can not comment on it.” TCG approaching the Paris court over the disputed 155 million shares (part of auctioned shares) is likely to stall the state government’s divestment effort. State-owned India Oil Corporation has been selected as the bidder for the 40 per cent stake put on the block by the government.