Choudhury: In search of funds
Calcutta, Sept. 26: Haldia Petrochemicals Ltd (HPL) has requested lenders such as the State Bank of India and IDBI Bank to bail it out with funds for loan repayment and insurance premium.
The company needs Rs 133 crore to pay the dues by September 30 as it struggles in a weak market.
“We are managing cash on a daily basis, buying raw material naphtha and selling the final product polymer. How do we bring in this money due to be paid by the end of this month,” Sumantra Choudhury, managing director of HPL, said after the annual general meeting of the company today.
HPL has to pay an interest of Rs 30 crore on an external commercial borrowing, Rs 68 crore as principal on a term loan and Rs 35 crore as insurance premium.
Choudhury said inventory had doubled because of weak demand. “We have 28,000 tonnes of stock compared with 13,000-15,000 tonnes, which is a tolerable limit. This is the case for all petrochemical companies such as Indian Oil Corporation, GAIL or Reliance. We are hoping the market will revive and the Chinese will come back in October. But it is all linked to the international movement,” Choudhury said.
Industries minister Partha Chatterjee, who is also the chairman of HPL, said the two principal promoters — the Bengal government and The Chatterjee Group — had jointly sought funds from the SBI and IDBI on September 20.
“We are very hopeful that they would give us some money,” Chatterjee said after the AGM.
Sources said it was unlikely that the lenders would fully meet HPL’s requirement.
In the meeting in Mumbai attended by Bengal industry secretary Alapan Bandopadhyay, TCG chairman Purnendu Chatterjee and Choudhury, the lenders asked the promoters to bring in equity. But the promoters were non-committal.
The company is expected to come up with some funds by force-selling its stockpile. HPL’s inventory is valued at Rs 250 crore. A 50 per cent reduction, which is the average the company usually carries, can bring in Rs 125 crore.
The company slashed production by half from yesterday in the wake of a severe financial crunch, operating at 125-tonnes-per-hour capacity compared with 190 tonnes a few days back. The full capacity is around 250 tonnes per hour.