The Telegraph
Since 1st March, 1999
Email This Page
Bengal govt pulls Haldia Petro plug on Purnendu

Calcutta, July 28: The Bengal government today shut the doors of Haldia Petrochemicals (HPL) on Purnendu Chatterjee.

In a letter to Purnendu, who had earlier been given the option to acquire the government’s 38.67 per cent stake in HPL, the Buddhadeb Bhattacharjee government made it clear that it was no longer interested in negotiating with the NRI businessman.

“We will not sell our stake to Purnendu any more, we have informed him categorically,” state industries and commerce minister Nirupam Sen said.

“The decision has been prompted by his unnecessary dilly-dallying over the past four months.”

The decision ' three days before the expiry of the July 31 deadline that the government had set for Purnendu to arrange for funds and effect the share transfer ' was conveyed to the NRI by industries and commerce secretary Sabyasachi Sen at a meeting held outside Writers’ Buildings.

The day also saw the cancellation of the vital HPL board meeting scheduled for Friday.

Contacted late in the evening, Purnendu said: “I haven’t seen the letter, but I don’t want to refute what the government has said. I don’t know the basis of the decision but I would like to appeal to them and request them to reconsider their position.”

On July 25, Purnendu had sent a detailed proposal, along with a letter from Deutsche Bank and a contract drafted by law firm Amarchand Mangaldas, to the government.

“If they have timed me out of the deal, I would like to request them to extend the time limit by a reasonable amount to meet all the statutory requirements,” Purnendu said.

The Bengal government has all along been insisting that Purnendu should put the money for the stake ' Rs 1,560 crore ' on the table, which he could not do for months.

This, sources said, prompted the government to harden its stand.

Relations soured further following confusion about the mode of acquisition.

“I had never talked about a leveraged buyout because Indian laws and our lenders would not have allowed that. Besides, HPL assets cannot be leveraged to buy Haldia shares,” Purnendu said.

In a leveraged buyout, the acquiring entity borrows money to buy a company using the assets of the latter as security.

Will the exit of Purnendu mark the entry of IOC in the HPL deal' “It is too early to comment about that,” said Sen.

“I can only say the government will protect the interest of HPL.”

At least on that count, the Bengal government and Purnendu spoke the same language.

“We want to do the right thing for Bengal and for HPL,” the New York-based chief of The Chatterjee Group said.

First automobile FDI in Bengal,  

Email This Page