'HPL stake sale bids soon'

RIL, Cairn India and IOC, GAIL India and ONGC are in the hunt for the stake in eastern India's biggest petrochemical company

Final price bids for Haldia Petrochemicals Ltd (HPL) stake sale are expected to be submitted by mid September, according to officials with direct knowledge of the matter.  

Earlier, West Bengal government which holds about 40% stake in eastern India’s biggest petrochemical company had said it will select the final bidder by end of September. That looks almost impossible as bidders had raised issues with the share purchase agreement.

 

“We had expected that bidders will submit bids by 31 August but that did not happen as they had raised issues with the share purchase agreement. As of now, things look like bidders are likely to submit the bids by about mid September,” said an official close to the development requesting anonymity.

 

At present, Mukesh Ambani-led Reliance Industries, Cairn India and state-run Indian Oil Corp, GAIL India and Oil and Natural Gas Corp are in the hunt for the stake in eastern India’s biggest petrochemical company.

 

Though the Bengal government has been keen to make an early exit from HPL but according to officials in HPL the stake sale process would not be over before end of current year. Even after selection of the final bidder, the state government has to give a month’s time to The Chatterjee Group (TCG), another key promoter, to match the price offered by the highest bidder. Purnendu Chatterjee-led TCG has the right of first refusal over the government’s share in HPL.

 

HPL which is also facing a legal wrangle with TCG, key promoter, would be keen on final Supreme Court verdict on a appeal filed by TCG’s Purnendu Chatterjee.  

The government received a boost from a recent Supreme Court order when the court refused to stay on a special leave petition filed by TCG challenging a Calcutta High Court order barring it from approaching the International Court of Arbitration in Paris. But final verdict in the matter is expected to come this month which would be crucial to sale of HPL.

 

The state government, in consultation with Deloitte India, is expected to circulate the final draft agreement among the suitors before final price bids are submitted. Among the concerns raised by the bidders on the share-purchase agreement is the fact that the suitors want to pay, when successful, in tranches rather than giving the full amount at once. However, the HPL official ruled out the claim by bidders that the agreement prepared by the government did not mention about TCG’s right of first refusal.