The Telegraph
Since 1st March, 1999
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Gail fills IOC vacuum in Haldia

Calcutta, Jan. 22: The corporate debt restructuring cell of the Reserve Bank of India (RBI) today approved the debt restructuring package of Haldia Petrochemicals Limited (HPL).

The plan does not include Indian Oil Corporation’s (IOC) possible involvement as a strategic investor. Instead, it is Gail (India) Limited that has taken its place. The pipeline PSU will get a 15 per cent stake for Rs 350 crore.

HPL’s paid-up equity has been pegged at Rs 2,000 crore under the package, which also includes an initial public offer (IPO). At present, the equity base is Rs 1,153 crore. The Bengal government has infused Rs 540 crore, The Chatterjee Group Rs 433 crore and the Tatas Rs 180 crore.

Though IOC has no role in the debt-revamp plan, the Bengal government indicated this evening that it would invite the petroleum major to participate in the company.

“The CDR cell dealt only with Gail’s proposal. The one sent by IOC was not discussed, though we are open to the idea of inviting it once the package is through,” state commerce and industry secretary Sabyasachi Sen told The Telegraph.

Asked whether Purnendu Chatterjee will hold the controlling stake in the restructured Haldia Petrochem, Sen said: “After the CDR, nobody will have a controlling stake. So, if we feel like, we may invite IOC.”

Indian Oil had formally submitted its investment proposal to the CDR cell, but a senior banker said it was preceded by another plan from HPL’s existing promoters. The government will first discuss the matter with the existing promoters — mainly Purnendu Chatterjee of The Chatterjee Group — and Gail before inviting IOC.

Earlier, Sen had said after a meeting with M. R. Nayyar, director (business development) of IOC, that the state government was keen to rope in the oil major. He had even talked of a roadmap to ensure this was done.

IOC had given a proposal to pump Rs 5,700 crore into HPL. The investment was envisaged in two parts — Rs 700 crore as equity infusion and the remaining Rs 5,000 crore for converting Haldia into a petrochemical hub by setting up petrochem-associated plants.

Industry watchers feel the Bengal government had not pushed IOC’s proposal since Gail chairman Proshanto Banerjee wrote to HPL chairman Tarun Das early this month saying his company would participate only ‘on an exclusive basis’, not in partnership with any other entity. That includes IOC.

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