The Telegraph
Since 1st March, 1999
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Foreign cash for HPL debt

Calcutta, Dec. 2: Having failed to rope in state-run gas firm Gail India, Purnendu Chatterjee, one of the main promoters of Haldia Petrochemicals (HPL), has approached overseas financial institutions for short-term finances to service the company’s interest dues. HPL has sought more time from banks and financial institutions before they declare it a non-performing asset.

According to the Rs 700-crore debt restructuring package approved by the Industrial Development Bank of India, HPL was supposed to bring in Rs 500 crore within November 30. The rest Rs 200 crore will have to be brought in by February 28.

“The promoters have sought time from banks and FIs till December 31 so that they do not declare HPL a sticky asset. Gail had said it would not invest in HPL before the latter restructured its debt, a demand the promoters had refused to meet. Under these circumstances the company will have to clear at least a portion of their dues to the banks and FIs by December 31,” HPL sources said.

Sources added Purnendu Chatterjee is busy arranging funds to repay a portion of the interest due to banks and FIs. The company had not cleared its interest payment since last December. Chatterjee will securitise the commercial agreements that HPL has signed to raise the loan.

“We are examining their proposal. However, we feel the company is taking a long time to carry out the things needed for debt restructuring and they should speed up the entire process. We have given them enough time,” IDBI officials told The Telegraph from Mumbai.

It is expected that Chatterjee will leverage the commercial agreement that Gail is willing to enter into a marketing alliance with HPL for product swapping.

The two companies will enter into four commercial agreements for offtake of polypropylene, propylene and pentane besides swapping 40,000 tonnes of polyethylene. Gail will buy 35,000 tonnes of polypropylene from HPL and sell 20,000 tonnes of pentane and 7,000 tones of propylene to the petrochemical company.

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