The Telegraph
Since 1st March, 1999
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Bengal to Purnendu: take it or leave it

Calcutta, April 19: Purnendu Chatterjee has been made an offer he can refuse only at his own peril.

The Bengal government has proposed to Chatterjee that he buy the 36 per cent stake it holds in Haldia Petrochemicals Ltd. Chatterjee, who is the private partner in the company, would have to pay Rs 1,560 crore if he were to accept the offer. The purchase will make him the single largest shareholder with management control, an ambition he has nursed all along.

If he cannot put up the money, the government is free to offer the stake to some other entity, most likely the Indian Oil Corporation. Earlier, IOC had made a proposal to invest in Haldia Petro but wanted management control, which was not acceptable to Chatterjee, but the public sector giant has not lost interest.

After Chatterjee's opposition, it lowered its investment offer to 7.5 per cent of Haldia Petro's shares and even paid Rs 150 crore. But it has not been allotted the shares, a fact that IOC chairman Sarthak Behuria, who met chief minister Buddhadeb Bhattacharjee, mentioned today.

'We are yet to receive the shares. It is for the shareholders to decide when it will be issued in our name,' he added.

Chatterjee has to pay Rs 30 a share, which means a premium of Rs 20. At a face value of Rs 10 a share, the government's 36 per cent holding is worth Rs 520 crore. Add the premium and Chatterjee's purchase price will be three times.

It is not known if he can raise that kind of money ' no one in the Chatterjee camp took calls ' but in the past he has had trouble meeting his financial commitment.

If he cannot, IOC is waiting in the wings. Behuria said: 'HPL is a good acquisition. We have feedstock (naphtha, Haldia Petro's raw material) supplies. It will give us an opportunity for forward integration on an all-India scale.'

Chatterjee has been insisting on gaining full control, arguing that the company should not fall into the hands of the public sector.

Haldia Petro has a paid-up capital of Rs 1,410 crore, which is shared among the government, Chatterjee (43 per cent), institutional investors (17.5) and the Tatas (3.5).

The price of Rs 30 a share has been fixed by the government in consultation with L.B. Jha & Co, which has been advising it on Haldia Petro.

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