Yet again, HPL stares at BIFR doors

Lenders are still wary of injecting more funds into the cash-strapped petrochemical major

Eastern India's largest petrochemical company Haldia Petrochemicals (HPL) is once again staring at the doors of Board for Industrial and Financial Reconstruction as its net worth, according to the latest financial statement, is around Rs 900 crore. HPL's net worth should be more than Rs 1,200 crore to save it from reporting to BIFR.

According to a senior HPL official who was present at the last lenders meet in Mumbai told Business Standard that the lenders are still wary of injecting more funds and have asked the cash strapped petrochemical major to bring in more fund before they expect lenders' help.

"It is a fact that HPL is now fit case for BIFR and during the last meeting it was made clear by the bankers that promoters have to bring more funds. The future is highly uncertain now," he said.
 
Requesting anonymity, he pointed out that no new date has been fixed for next meeting with the lenders. "The kind of situation the state government is in, it may not be able to assemble substantial funds before March," he added.
 
The Bengal firm is suffering Rs 50-60 crore of cash loss every month and desperately needs non-interest bearing funds to the tune of Rs 1,000 crore. HPL has defaulted on working capital loan.
 
In March 2012, HPL was in similar situation and was about to be reported to BIFR but the board then had approved conversion of a part of HPL's  loan into equity and that saved the day for HPL.  Partha Bhattcahrya was the MD of HPL during that tenure and currently that post is held by Sumantra Chowdhury.
  
Reports have been surfacing that oil major IOC is interested to buy the state's share but according to a source in TCG that too would not be possible. "Look at the relation between the state and centre after Mamata withdrew support from the centre. They don't share a cordial relation at all so centre won't allow IOC to get involved in this beleaguered firm," the source said.

Bankers have an exposure to the tune of Rs 3,800 crore in HPL and also hold 7.58% equity stake in the company. The Tata Group has 2.67 per cent stake as well.

When asked regarding these issues earlier, HPL chairman and state industries minister, Partha Chatterjee had told Business Standard that, "We would see how to handle it."

The state government which holds close to 40% stake in HPL has started off its share sale task and has appointed Deloitte India to execute the divestment plan and a valuation process is going on. But the recent downgrade by ICRA has added to its miseries and is likely to have a negative impact on that.