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Several PSU bodies had shown interest in buying out West Bengal government's share in Haldia Petrochemicals Ltd (HPL), which is on the block, but owing to the legal tussle facing the Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of oil & gas major ONGC, is no more interested in the company.
PP Upadhyay, MD of MRPL, told Business Standard that it made no sense to buy the shares of a loss -making company at this stage.
"There was an interest in HPL, but that has died down. The key promoters are fighting a legal battle which is getting complex everyday and a solution doesn't seem to get any nearer. In such conditions, I would rather stay away from a company like this,” he said.
Earlier in June last year, key officials of MRPL, citing forward integration operations, had came down to Kolkata to meet Partha Chaterjee, chairman of HPL.
West Bengal Industrial Development Corporation (WBIDC), through which the government holds close to 40% stake in HPL, has been in a hurry to get out of the troubled joint venture that was incorporated in 1984. Purnendu Chaterjee-led TCG is another key promoter but TCG has been demanding management control and that has taken both the promoters to courts.
Indian Oil Corporation (IOC) already has an 8.89% stake in HPL by virtue of a Rs 150-crore investment made in 2004.
On the other hand, HPL has faced a couple of downgrade by rating agency over its long term debt and the earnings per share is also in the negative, according to officials close to the development.
MRPL's disinterest would come as a jolt to the government's plan to shrug off its stake from HPL as it would get more difficult to find prospective buyers.
HPL, has defaulted on working capital loan and is in immediate need of around Rs 800 crore loan from the bankers. SBI, IDBI, PNB are the lead bankers of the petrochemical company. Lenders have been pressing the promoters to bring in equity without which lenders are not ready to release any further help, said an official of IDBI bank who looks after the account of HPL for the bank.
The Bengal firm is suffering Rs 50-60 crore of cash loss every month and operational capacity has been hovering around 50%. According to experts, if a petrochemical company runs below 70% of its capacity it will have a negative impact on the plant in the long run.
