HPL wants govt to denotify oil company tag

Eastern India’s largest petrochemical company Haldia Petrochemicals Ltd (HPL) has suffered a revenue loss of about Rs 360 crore per annum since 2006, as it was notified as an oil company and thereby not being able to claim sales tax remission of motor spirit oil. The company has taken up the matter with the new state government, a top company official said here today.

“We have suffered a loss of Rs 360 crore per annum due to the decision by the government to treat us as an oil company in 2006. We have taken up the issue with the new state government to denotify as an oil company enabling us to claim the sales tax remission of motor spirit oil,” said Partha Bhattacharyya, HPL managing director.

Meanwhile, for the revival of the company, this issue along with waiver of import duty on naphtha and the baltlle of ownership issues should be solved. “The zero date for development plans for me is the day at which these issues are solved. After that we may be able to come up with an operational restructuring plan,” he said. The state industry and commerce minister Partha Chatterjee has already written to the Union finance minister Pranab Mukherjee regarding this.

During the last financial year, the company’s turnover was around Rs 7800 crore, while it is expected to touch Rs 10,000 crore this fiscal. The company was already suffering a loss of Rs 350 crore per annum due to the 5 per cent duty on naphtha, as a major portion of naphtha for the company is from imports.

However, regarding the buzz over an out of court settlement on the ownership issue, he said, “It is a matter of court. The hearing is over and I am sure both sides will accept whatever court decides.” Over last few years, both the major shareholders, The Chatterjee Group (TCG) and the West Bengal government over shareholding pattern of HPL.

HPL is planning to invest about Rs 4,000 crore in eight projects. For the projects — which include butin, ethylene propylene diene monomer (EPDM), styrene-butadiene rubber (SBR) and maleic anhydride — the company will look for private equity (PE) partners at a debt equity ratio of 1.5:1. However, Bhattacharyya said though the company has financial difficulties, developmental projects will not be affected.