| another cash call
Calcutta, Nov. 30: The corporate debt restructuring cell, led by Industrial Development Bank of India (IDBI), has asked the promoters of Haldia Petrochemicals to chip in with Rs 600 crore to start the restructuring exercise.
Earlier, banks and financial institutions (FIs) had insisted that the promoters should bring in Rs 1,000 crore for debt restructuring.
“This has been communicated to the promoters at a meeting held recently. They are willing to invest Rs 468 crore. However, we feel that this amount should be revised to work out a favourable debt-equity ratio,” a senior IDBI official said.
The official felt that an infusion of fresh funds is important for completion of the debt restructuring exercise by January 22.
Transfer of shares by the Tatas was not discussed at the meeting even though it is a part of the restructuring process. “It will be done after the promoters — Purnendu Chatterjee of The Chatterjee Group, the Bengal government and Gail (India) Ltd — decide on the equity infusion,” the IDBI official added.
Banks and FIs had earlier pegged the debt burden of Haldia Petrochemicals at a sustainable level of Rs 3,300 crore against Rs 4,300 crore.
They had calculated the debt burden based on a formula saying that a sustainable burden should be five to six times of the earnings before depreciation, interest and tax (EBDIT). Haldia Petrochemicals has an EBDIT of Rs 600 crore.
“The promoters had asked us to look into the debt burden once again before taking a final stand. We have formed a committee comprising IDBI, ICICI Bank, State Bank of India, IFCI and Allahabad Bank. The committee is currently looking into the matter,” an IDBI official added.
The corporate debt restructuring cell has rejected the company’s proposal to bring down the interest rate to 8 per cent and writing-off some of the loans. The lenders feel that the interest should be charged at the prime lending rate of 11.5 per cent.
Haldia Petrochemicals officials feel that long-term naphtha credit is one way to fund the additional equity infusion that the cell may ask. “There are many naphtha suppliers who are eager to provide us long-term naphtha credit. But they are also insisting that debt restructuring should be done before they enter into an agreement.”
The company now buys naphtha mainly from Indian Oil Corporation and Oil and Natural Gas Corporation. It also imports naphtha.At present, Haldia Petrochemicals is earning an EBDIT of Rs 50-60 crore per month and its factory in Haldia is running at 100 per cent capacity utilisation.