Paharpur Seeks Ally For Haldia

Paharpur Industries is scouting for a foreign partner to pick up stake in the Rs 1,600 -crore fertiliser project coming up at Haldia.

The Swarups, the main promoters of the mega project with an estimated equity component of Rs 455 crore, are negotiating with a number of US-based firms having interests in the fertiliser sector. Gaurav Swarup, Paharpur's director (operations) said "we are negotiating with a number of companies. However, since I am bound by confidentiality, I cannot reveal the names of these firms," he said.

The Swarups hope to clinch the deal by March-end. The promoters have also approached the West Bengal Industrial Development Corporation for picking up a token equity. The project finance involves a sizeable debt of Rs 1,145 crore and the debt-equity ratio has been fixed at 2.5:1. According to sources, the promoters are believed to be negotiating with American Insurance group (AIG) for possible equity. Gaurav, however, refuted it.

 

It is learnt that negotiations are going on with the Manila-based Asian Development Bank, and possibly the AIG, besides the Washington-based International Finance Corporation, the UK-based Commonwealth Development Corporation and the Exim Bank outfits in Japan and Germany for foreign loan tie-ups.

The promoters have already procured Reserve Bank of India's permission for external commercial borrowings up to 35 per cent of the project cost. This means, up to Rs 560 crore can be tapped from overseas financial institutions. Sources hope overseas funds will ultimately flow in from a consortium formed by some of these institutions.

Overseas debt will also be tapped once the debt market picks up, sources said. Technical bids are expected to be finalised by May-end.

The promoters have already pre-qualified an impressive list of global bidders for the engineering-procurement-construction contract.