| Pall of uncertainty pales
Calcutta, Sept 23: Haldia Petrochemicals Limited (HPL), the state’s showcase project, is finally out of the woods.
Industrial Development Bank of India (IDBI) has approved the long-awaited debt restructuring package for the Rs 5,170-crore company, helping it avert the embarrassment of losing face with banks and institutions. Had it not come through by September 30, loans would have turned into a non-performing asset (NPA).
IDBI, the kingpin in a posse of lenders, has agreed to convert a portion of its loans into equity, a moratorium on repayment of principal for five years from the date of commercial production and a reduction in interest rate.
HPL chairman Tarun Das, away in London when banks and FIs decided to slosh succour, said he could not speak on the ramifications until he came back home. “I have heard about it. Since I am in London I cannot comment further,” he told The Telegraph.
However, the helmsman had dropped hints to reporters in Calcutta 10 days back that the crisis would be overcome. He was confident HPL would not become an NPA and that things would be “right” by October 1.
HPL has borrowed Rs 4,200 crore from banks and FIs, and pays Rs 135 crore in interest every quarter. That mountain of loans pushed up its debt-equity ratio from a relatively benign 1.4:1 to an adverse figure of 5.2:1.
The company’s equity stands at Rs 1,260 crore, 86 per cent of which is evenly split between The Chatterjee Group (TCG) and the Bengal government; the remaining 14 per cent is with the Tatas, who have agreed to transfer their shares to the state government and leave.
The cash clutter has weighed down HPL’s bottomline, and undermined the success achieved in manufacturing and selling high-quality products widely.
IDBI’s decision has been prompted by Gail’s readiness to pick up a 10 per cent stake in return for a Rs 200-crore investment in HPL. The pipeline PSU has also committed another Rs 300 crore to a marketing tie-up.
On his part, Das promised banks and FIs that the company would inject Rs 200 crore by March. A section of HPL officials feel it is due to Das’ persistence that things have moved so fast. “He joined the company on October 17, 2001 and, within a span of 11 months, has been able to bring in a fourth equity partner and convince banks and FIs to restructure debt.”
“In the past few months, Purnendu Chatterjee and Das have put their heads together to clean up the financial mess. IDBI has not informed us so far but, when it does, it will be a pleasant,” said officials of TCG, which has pumped around Rs 540 crore into the project.
Das had rejected Indian Oil’s proposal to acquire HPL’s management control with a 26 per cent stake. He was confident of roping in a fourth equity partner and steer HPL through a professional board.
State commerce and industry minister Nirupam Sen was not available for comment, but officials of the commerce and industry department said the lenders’ gesture will bring relief to a company that is working at full pelt.