HPL stake sale: First right of refusal to be with TCG

The West Bengal government has reiterated that though it is taking auction route for selling of its shares at Haldia Petrochemicals Ltd (HPL), the first right of refusal would be given to would be given to another promoter The Chatterjee Group (TCG), after auctioning. The process is expected to get a procedural kickoff by the end of this month.

“The Board of West Bengal Industrial Development Corporation (WBIDC) has already cleared the proposal for stake sale. We will procedurally kickstart the process after Laxmi Puja (October 29). However, even if it is auction route, the first right of refusal would be given to TCG, based on the highest price offered duing the bidding process,” said Partha Chatterjee, chairman of HPL and the commerce and industries minister of West Bengal.

According to sources, the preparation of tender document is likely to happen only after October 29. Early this month, the state government had notified the sales of its 39.9 per cent stake in HPL.  TCG owns around 37 per cent in the eastern India’s largest petrochemical company.

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.

There were also speculations that their may be a halt in production, due to drop in demand and also due to higher stocks of over 29,000 tonnes of polymers and chemicals. However, the firm’s managing director Sumantra Chowdhury denied such speculations.

“There is no chance of closing down the operations. There is obviously an issue due to lack of demand.  We are currently running on 50 per cent capacity,” he said.