Purnendu Chatterjee might head HPL

If approved, IOC may call off its bid for state's 40% stake on sale

In a bid to resolve the long battle over Haldia Petrochemicals Ltd (HPL), the West Bengal government, a principal promoter of HPL, is planning to offer the post of chairman to The Chatterjee Group (TCG) chief Purnendu Chatterjee. Bankers of HPL too have endorsed the idea and are pitching hard for the chairmanship of Chatterjee.

The ailing petrochem company has been struggling with its partial stake sale so far. TCG is the key private promoter of HPL and has been at loggerheads with the principal promoter—the West Bengal government—over management control.

According to a senior banker, who is part of the lenders’ consortium on HPL, the state government has been informing the lenders about meetings with TCG and the government over the past couple of months. During a crucial meeting on Wednesday in Mumbai, the government has proposed the idea of giving the post of chairman to Chatterjee.

MANAGEMENT ISSUES

• TCG is the key private promoter of HPL
• TCG has been at loggerheads with the principal promoter—the West Bengal government—over management control

“We are backing this idea strongly as this would lead to a concrete solution for the company, which is in dire need of funds. However, we would take a call on further lending to HPL after they (promoters) take a final call on the matter,” the banker said, adding that this would be the top agenda on the next board meeting of HPL on March 10. SBI, IDBI and PNB are the lead bankers for HPL.

But things would not be as smooth as they might appear to be.

PSU major, IOC, which emerged as the sole valid bidder for the Bengal government’s 40 per cent stake on the sale, might call off its bid if the TCG chief is given the mandate of chairman in HPL.

“First of all, the government has to communicate to us. But if Purnendu Chatterjee becomes chairman, then there is no point in buying the state’s stake which was put on sale. We would withdraw our bid,” a senior IOC official told Business Standard by adding that the PSU major is not keen on getting into another legal battle with the government over the matter.

“But we haven’t thought about the legal options so far,” he clarified.

After submission of Expressions of Interest by the sector majors in reply to the government’s invite for the stake sale, IOC had emerged as the sole valid bidder for Bengal’s stake earlier this year and offered to buy the shares at Rs 25.10 each. So far, the government has not been able to close the sale due to legal battles with key private promoter TCG.

In the past, Chatterjee has said that he would infuse about Rs 500 crore if he was given the control over the management of the ailing petrochem firm. The company, at present, does not have a chairman after former state industries minister Partha Chatterjee resigned from the industry department portfolio.

The company is also staring at BIFR (Board for Industrial and Financial Reconstruction) doors as its net worth has eroded owing to continuous loss-making operations. It has been struggling to get adequate naphtha to run the plant to full capacity.

After Partha Chatterjee’s exit from the petrochem company, the approved Rs 1,300 crore rights issue was put on the backburner and there has been no word from the promoters on the same.