The restructuring of Haldia Petrochemicals Ltd (HPL) is likely to be completed in 60 days, company chairman Tarun Das said today.
Speaking to media persons after the company's board meeting, Das said: "The HPL management would be working out a restructuring package to be placed before the consortium of financial institutions. The institutions are happy with the new arrangement and we expect things to take shape by March 31."
Today's meeting was the first HPL board sitting after the January 12 decision of the West Bengal government to allow The Chatterjee Group (TCG) of Purnendu Chatterjee to raise its equity stake in HPL to 51 per cent.
HPL was looking at fresh capital infusion of Rs 600 crore in the form of equity to retire the company's high cost borrowings and reduce the annual interest outgo.
H K Khan, Industrial Development Bank of India nominee on the HPL board, confirmed the development and said the consortium expected HPL to work out the restructuring package within a month.
"The board has indicated that Rs 600 crore of fresh capital infusion would be required in the company," Khan said.
With the capital infusion, HPL's interest burden is likely to come down from the present Rs 550 crore to around Rs 250 crore.
"We are looking at a 1.8:1 debt equity ratio in HPL," board level sources said. On the issue of induction of a strategic partner in the company, Das said negotiations with the Indian Oil Corporation would continue and the issue of handing over the management control to the public sector unit could be negotiated.
"They are ready to bring in Rs 500 crore to HPL and there is no reason why existing promoters would not consider it," Das said.
Chatterjee said TCG was ready to talk to any enterprise interested in the company. "The IOC chapter is not closed," Chatterjee said.
TCG has brought in Rs 53 crore as promised in the fresh agreement of January 12 and the rest would come in as committed by the group.
Once TCG made the entire payment, the paid-up equity capital of HPL would go up to Rs 1,260 crore, with TCG and the Government of West Bengal holding Rs 541 crore each. The balance Rs 178 crore would be held by Tata Sons.
Under the new arrangement, the Tatas would sell out 14 per cent stake to the West Bengal government which in turn would sell 8 per cent out of it to TCG. The state government will retain the balance 6 per cent.
Das indicated that Tatas would exit the company by selling their stake at face value. "Although I have not seen the agreement, it should be at par," Das added.
The chairman said he expected the new agreement to work well. "There was civil war in the company and now there is peace. Nowhere in the joint sector does the government have management control. When I attended the first board meeting on October 17, 2001, I sought 90 days' time to sort out the promoters' issue and the new agreement was reached within that timeframe. I hope to meet the 60 days deadline as well," Das added.
