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Money matters
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Calcutta, Sept. 30: Haldia Petrochemicals Ltd (HPL) is going to pay Rs 133 crore to banks, financial institutions and insurance companies in phases over the next few days from its working capital to keep the plant running.
The company has decided to meet the contractual obligation to avoid defaulting and a rating downgrade even though operations have touched a low point.
“We have to pay Rs 35 crore insurance or the plant cannot run. We also have to pay Rs 30 crore interest on an external commercial borrowing to avoid downgrade by rating agencies. We will pay all that in the next few days,” managing director Sumantra Choudhuri said.
The plant is operating at around 58 per cent of its capacity. “This is suicidal. At this rate, we are in deep loss since the overhead cost remains the same. We must get up to 80 per cent at least,” he said.
HPL was saddled with a huge stockpile as the petrochemical market turned sluggish, both in India as well as abroad, in September.
It had an accumulated stock of 28,000 tonnes valued at Rs 250 crore against a tolerable level of 15,000 tonnes. The company has managed to reduce it by 5,000 tonnes and release some cash in the process.
It is also expecting a loan from the State Bank of India to increase productivity.
HPL is buying naphtha on a cash-and-carry basis to meet the daily requirement of the main raw material. Unless it gets a fresh loan to buy more naphtha, the company cannot increase production.
The management is holding talks with key customers to assure that the plant will increase output to meet demand.
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