UBI not to extend finance to HPL any more

City-based United Bank of India (UBI), one of the lenders consortium to the fund-starved Haldia Petrochemicals Ltd (HPL), would not extend any further financial assistance to the company.

"HPL needs funds to sustain operations which have started lately after a period of prolonged closure. But we are not going to extend further assistance to the company," an UBI official told PTI.

The official said UBI had given HPL Rs 275 crore as loan earlier.

"The account has already become an NPA and therefore there will no further exposure to the company. Why should increase our NPAs further," he said.

UBI, already reeling under a huge burden of NPAs, has decided to bring down the Gross Non Performing Assets (GNPA) percentage levels to a single digit, which was now at double digits.

HPL, which was closed for more than seven months since July 2014 owing to severe shortage of working capital, resumed operations after its promoter TCG provided Rs 100 crore as margin money and State Bank of India (SBI) providing loans between Rs 500 crore and Rs 600 crore.

The requirement of funds to re-start operations was Rs 900 crore, while Rs 2,300 crore was needed for entire financial restructuring of the company.