Bengal says RIL keen on open auction for Haldia stake sale

Mukesh Ambani-led Reliance Industries Ltd (RIL) has asked the West Bengal government to have an open auction for Haldia Petrochemicals Ltd (HPL).

“We are considering the request made by RIL, while IOC and ONGC have also shown interest in putting the bid via a joint consortium,” said Partha Chatterjee, state industries minister and HPL chairman. Queries sent to RIL did not elicit any response.

RIL’s proposal for open auction comes shortly after RIL chairman Mukesh Ambani met West Bengal chief minister Mamata Banerjee in Mumbai last week. While it was known that HPL was on top of Ambani’s agenda, it is not clear whether he had raised the open bidding proposal with Banerjee.  

AMBANI IN HALDIA FRAY?

• Mukesh Ambani-led Reliance Industries has pitched for an open auction for Haldia Petroleum stake, says Bengal govt
• Other bidders are opposing it. IndianOil and Oil and Natural Gas Corp (ONGC) want to bid jointly
• Open bidding consits of multiple bids till the highest price is reached
• Closed auction, the traditional one, is a single-price bid offered in a sealed envelope
• Apart from Reliance, IndianOil, ONGC, GAIL and  Cairn India have given expressions of interest

In open auction, there are multiple rounds of bidding and participants can place higher bids after competitors declare their bid price. The old bidding process, favoured by other bidders, is a single price bid which is offered in a sealed envelope.

Chatterjee said the government would be fair to everyone.  Apart from RIL, IOC, ONGC, GAIL and Cairn India have given Expressions of Interest (EoIs). Plant visits by the bidders started from August 1 and is expected to finish by the end of this week.

The state government holds around 40 per cent in the company via the West Bengal Industrial Development Corporation.

Another HPL official said while joint bidding and open auction was being considered, much would depend on the government’s decision. “The EoIs were generated by saying it would be a closed bidding,” he added.

While the state government is in a hurry to make an exit from HPL, The Chatterjee Group’s (TCG) Purnendu Chatterjee has recently filed an appeal in the Supreme Court challenging the Calcutta High Court order, which barred TCG from moving the International Court of Arbitration in Paris. TCG is a key promoter of HPL along with the Bengal government and Chatterjee holds the right of first refusal in the HPL stake sale.