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HPL springs new equity-infusion option

Calcutta, Oct. 27: Haldia Petrochemicals Ltd (HPL) wants to use its naphtha credit of Rs 232 crore to bridge the gap in its Rs 700-crore additional equity. The company, which is yet to rope in a fourth equity partner, had placed this proposal before the Industrial Development Bank of India (IDBI) at the first corporate debt restructuring meeting held recently in Mumbai.

IDBI had asked the petrochemicals company to bring in Rs 700 crore fresh equity as part of the corporate debt restructuring (CDR) exercise.

When contacted, senior officials of IDBI told The Telegraph from Mumbai, “All the lenders and IDBI are currently discussing whether the long-term naphtha credit can be treated as a part of the Rs 700-crore fresh equity. We are yet to take any decision on the matter.”

The main task of the CDR cell is to reduce the debt-equity ratio of the company, which currently stands at 5.2:1, the officials added. The company is saddled with a huge debt burden of Rs 4,200 crore with IDBI and State Bank of India being the major lenders.

The other components of the debt restructuring package are reduction in interest rate and re-working of the repayment schedule.

The company had earlier submitted a debt restructuring package to IDBI. Under the package, the promoters agreed to invest Rs 468 crore. Of this, Rs 200 crore would come from Gail and Purnendu Chatterjee’s The Chatterjee Group would chip in with the remaining Rs 268 crore. Gail has decided to pick up a 10 per cent stake in the company.

“There are certain international players who are ready to provide long-term naphtha credit to the company. Based on that we have framed our proposal and submitted it to IDBI,” said senior officials of the company.

The present equity of the Rs 5,170 crore Haldia Petrochem is Rs 1,153 crore. The Bengal government has given Rs 540 crore, The Chatterjee Group Rs 433 crore and the Tatas Rs 180 crore. Another Rs 107 crore have been kept aside by Purnendu Chatterjee in an escrow account that is yet to be converted into equity.

The HPL management has paid interest to all creditors till June 30. The company’s earnings before interest, depreciation and tax (EBIDT) stands at Rs 50 crore per month since June. The company has a 63 per cent market share in eastern India and a 23 per cent market share nationally.

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