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Haldia debt recast to be over by this month

Calcutta, Dec. 13: The debt restructuring of Haldia Petrochemicals Limited (HPL) by Industrial Development Bank of India and Gail India’s equity participation in the company will be completed by December 31, HPL chairman Tarun Das said today.

“HPL will not turn out to be a non-performing asset (NPA) by December 31. Things are moving in the right direction. All negotiations take time and maybe HPL is taking more time. But I am optimistic that things will be sorted out soon,” Das told reporters. HPL has not paid interest to its lenders for three quarters.

Negotiations are now on between HPL’s promoters, Gail and IDBI regarding the debt restructuring.

“Hard bargaining is on regarding the interest rate—both the promoters as well as Gail want to see it reduced substantially,” Das said.

In fact, there will be a series of meetings next week as well regarding Gail’s equity participation and debt restructuring.

Das expects that Gail will invest on a par in Haldia Petro. “They have not yet communicated to us at what price they would invest in HPL,” he said.

HPL is also talking to a lot of other potential investors. “We are keeping a back-up so that if anybody backs out from his commitment to invest in HPL we will be able to arrange funds at that point of time,” he said.

The company, which is operationally doing well, will earn a profit of Rs 500 crore in the next financial year, Das said.

According to the Rs 700-crore debt restructuring formula approved by IDBI, Gail India will make an upfront payment of Rs 200 crore for acquiring a 10 per cent stake in HPL and enter into a Rs 300-crore marketing alliance with it.

For the remaining Rs 300 crore a special purpose vehicle will be jointly floated by Gail and The Chatterjee Group, where Purnendu Chatterjee will have a majority holding. HPL will issue preferential shares.

HPL’s promoters have, however, decided to take the securitisation route for mopping up Rs 300 crore. The company is currently talking to Lazard Caps and SBI Capital Markets for the securitisation deal.

Following the restructuring, the company’s debt burden will come down from Rs 4,200 crore to Rs 3,100 crore and its debt-equity ratio will come down to 1.5:1 from 5.2:1.

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