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IOC keeps doors open for Haldia
- Promoters, FIs need to make some sacrifices to rescue the project, says Ramachandran

Calcutta, March 8: Indian Oil Corporation (IOC) will take a fresh look at its investment plans in Haldia Petrochemicals (HPL) if the promoters of the company come up with a fresh proposal.

IOC chairman M. S. Ramachandran today said that the company’s earlier proposal might have lost relevance since more than a year and a half had elapsed. “We are open to a fresh offer on investment from the HPL promoters. But we also need to look back at our earlier proposals. In the last one and a half year, the situation has changed so much so that new numbers (on equity size and investment) may emerge,” Ramachandran said.

Recently, financial institutions are reported to have asked the promoters of HPL to bring in Indian Oil as a partner to find a way out of the financial mess.

Ramachandran said the promoters as well as financial institutions need to make some sacrifices so that the project survives.

“HPL is a good project but it is in a financial problem due to the heavy interest burden. Unless the promoters make some sacrifices, it is difficult for the project to reorganise its finances,” he said.

Ramachandran, who was in Calcutta to attend the second world conference of oil, gas and refinery trade unions, made it clear that the company does not want to be part of any management consortium set up to run HPL. “Too many cooks spoil the broth. We are interested in the project only if we get total management control,” he added.

He added that the project would not have faced such financial problems had they accepted the IOC proposal one and a half years back. The working capital problem would not have cropped up.

The IOC management further said that Haldia Petrochem was taking naphtha worth Rs 40 crore per month although it has been given a credit of Rs 300 crore.

Hinting that the credit limit for HPL might be withdrawn, he said, “We have asked HPL to pay the Rs 300-crore outstanding arrears.”

IOC had earlier proposed to invest Rs 468 crore to pick up a 26 per cent stake in Haldia Petrochemicals. The public sector oil major had, however, included a rider that the investment would be made only if it got management control in the project.

Indian Oil had also said that the investment would be made at par, and not with any premium, as sought by HPL’s existing promoters.

IOC had made it clear that the HPL promoters would have to agree to an equity and debt recast before it could expect any investment in the company. It has proposed that financial institutions convert Rs 321 crore of their total debt to HPL into equity.

Meanwhile, petroleum minister Ram Naik today said that HPL must undergo debt restructuring before Gail buys into the petrochemicals company.

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