TCG likely to object to bidding of HPL shares

All is not well as far as Haldia Petrochemicals is concerned.

Fresh out of a legal battle, the West Bengal’s showcase project in which The Chatterjee Group (TCG) and the state government are major shareholders, is staring at an even uglier battle over the shareholding pattern. With the state planning to auction 675 million shares, which is the state government's entire stake plus the disputed, officials close to the development said that TCG was likely to object to the bidding of the disputed 155 million shares among this.

The Purnendu Chatterjee-led group may take a tough stance over the state’s plan to auction the 155 million shares as the recent Supreme Court judgment did not specify on what to be done with it, the official said. This comes after the industry and commerce minister Partha Chatterjee said that the government will auction its shares in HPL.

The apex court had recently dismissed the petition filed by TCG against a decision by the Calcutta High Court allowing the state government to retain its 155 million shares. The company had challenged the High Court verdict which set aside a CLB directive which asked the government to exit HPL by selling shares to its private partner.

When asked about the government’s move, the TCG chairman said, “I am unaware about the state’s plan to auction its stake. Unless they inform, I cannot say what TCG’s stand would be.” The firm’s board meeting scheduled on Monday is set to discuss the issue in detail.

Earlier, the state government had reportedly mandated SBI Capital Markets to do a valuation of HPL, for selling its shares. “The state government seems to have put on hold, the valuation process. If they go for auction, it would be an open invitation for the competitors of HPL’s private partner. The ideal thing should be to wait for the company to turn around. Till then both the shareholders should wait,” the official added. The firm has a debt of Rs 3,500 crore now, including loans for various developmental projects. While HPL suffered a loss of Rs 247 crore during the last financial year, it has suffered a Rs 600 crore till November this year.

An auction was likely to evoke interest from different quarters. It is an open secret that Reliance Industries is interested in HPL. IOC has a minority stake in HPL while GAIL had also revived its interest recently.