Gives nod for notifying net worth erosion to BIFR

Promoter TCG says it is still open to infusing funds to the cash-strapped petrochemical company

Even as the Haldia Petrochemicals’ (HPL) stake sale is mired in legal wrangles, the Purnendu Chatterjee-led The Chatterjee Group (TCG) has reiterated it will infuse funds in the company to save it from going to the Board for Industrial and Financial Reconstruction (BIFR).

Earlier, when HPL’s stake sale was being planned by the West Bengal government, TCG had proposed to infuse Rs 500 crore into HPL. TCG had maintained it would infuse the sum if it gets the management control. The West Bengal government chose to go ahead with the stake sale and accepted Indian Oil Corporation as final bidder to hand over its 40 per cent stake.

The HPL board on Friday cleared a proposal to make a  preliminary notification to the BIFR. “Due to partial erosion of the net worth (of HPL), we have decided to make a preliminary notification to the BIFR,” Partha Chatterjee, HPL chairman and state industries minister, told reporters here on Friday. Chatterjee, who was also present in the board meeting on Friday, said: “We should ideally save HPL from going to BIFR.” When asked what can be the probable options for the same, Chatterjee said, “Our proposal (Rs 500 crore) is already with the government.”

HPL has been facing acute shortage of funds, with lenders becoming reluctant to lend further.

According to an early proposal, the government and lenders were supposed to bring Rs 100 crore and Rs 400 crore, respectively, into the company. None of this has fructified.

TCG was also suppose to exercise its right of first refusal (ROFR) on November 10, but two court orders have changed the course of action. According to the terms of ROFR, the government could have sold the shares to IOC if TCG does not inform the state about its decision by then. However, the exercise got delayed owing to legal reasons. Another key decision is expected on 26 November, which would be key to future course of the stake sale.

HPL chairman refused to comment on how the stake sale would go on, saying the matter was sub judice. He, however, said efforts were on to set up a meeting with the lenders once again to avail funds for the company.

HPL plant has been operating in the range of 50-60 per cent of its total capacity. Experts say running such a plant at less than 75 per cent of the total capacity adds to the woes of the plant.

Meanwhile, the board approved the appointment of former Mangalore Refinery and Petrochemicals Ltd Managing Director U K Basu till March 2014. HPL chairman said Basu had given a five-year road map for the company which was appreciated by all.