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The West Bengal government on Friday officially invited expressions of interest (EoIs) for selling its stake in Haldia Petrochemicals Limited (HPL), eastern India's biggest petrochemical company.
Through the West Bengal Industrial Development Corporation (WBIDC), the state government has about 40 per cent stake in HPL.
"The government of West Bengal, presently holding (i) 39.99 per cent of the paid-up capital through WBIDC and (ii) entire (100 per cent) paid-up preference share capital, through WBIDC, WBIIDC (West Bengal Industrial Infrastructure Development Corporation) and WBIDFC (West Bengal Infrastructure Development Finance Corporation), of Haldia Petrochemicals Limited, intends to divest its entire equity and preference shareholding in HPL through a competitive bidding process, with the objective of revival and restructuring of the company," the state government said in its invitation for EoIs published by WBIDC and Delloite in a financial news daily. The deadline for EoIs is June 10.
Purnendu Chatterjee-led The Chatterjee Group (TCG) is another key promoter of HPL. TCG would have the first right of refusal to the shares of WBIDC, which are on the block. If TCG refuses to buy the shares, the highest bidder would be able to acquire those. On behalf of WBIDC, consultancy firm Deloitte is handling the divestment process.
TCG President Anirudha Lahiri said, "Already, there are some legal cases with the state government. We are evaluating the legal implications of the EoI."
HPL Chairman Partha Chatterjee, also the state industries minister, said, "We have published the EoI on Friday and now, we are hoping some really big names would show interest in this."
TCG and the West Bengal government have been engaged in a battle for management control of the company. Indian Oil Corporation and Reliance Industries are also keen to acquire the government's stake in HPL. In an emailed statement, IndianOil told Business Standard, "IndianOil already has nine per cent stake in HPL. With this opportunity, after examining the EoI details, IndianOil will take a positive view in bidding and enhancing its equity."
Reliance Industries declined to comment on the matter.
However, securing the state government's stake won't save the day for the ailing HPL. Partha Bhattacharya, former managing director of HPL, said major investments would be need of the hour. Owing to the tussle between its promoters, HPL hasn't been able to secure funding from lenders. As a result, the plant has been running at 60-65 per cent of its capacity, leading to losses. As of March, the company's net worth was about Rs 500 crore - a case apt to be reported to the Board for Industrial and Financial Reconstruction. For 2012-13, HPL is expected to report a net loss of about Rs 600 crore.
