Calcutta, Oct. 9: Indian Oil Corporation is undergoing a nocturnal test as the sole official bidder for the Bengal government’s stake in Haldia Petrochemicals Ltd (HPL).
The IOC bid was opened today in line with legal advice to the government that the process can continue even though no other aspirant has formally filed an offer.
The government also informed IOC in writing that the public sector giant was the lone bidder in the fray for the West Bengal Industrial Development Corporation’s 39.9 per cent shares in HPL.
The clarification lifts the cloud over whether Reliance Industries Ltd, considered a frontrunner till Monday morning, put in a formal bid or not.
The government cleared the air after the IOC asked why its bid was not opened on Monday and whether there were any other bidders in the field following suggestions of a purported communication from Reliance.
The immediate focus will now be on the contents of the IOC bid document.
The group of ministers looking after HPL today called IOC officials to the Camac Street office of the WBIDC and opened the price bid.
The group of ministers — industries minister Partha Chatterjee, finance minister Amit Mitra, panchayat minister Subrata Mukherjee and power minister Manish Gupta — was locked in for more than three hours at the office where IOC representatives were present along with their lawyers.
A decision on the fate of the bid is expected to be taken tomorrow after the ministers hold consultations with chief minister Mamata Banerjee.
Sources said Deloitte, the WBIDC’s transaction adviser, has been asked to go through the IOC offer to verify if it is in conformity with the state government’s requirements.
The sources added that the advisers had been requested to burn the midnight oil if needed so that a clear picture would be available before the political leadership took the decision.
“The price offered for each share is not the only criterion. There are several other factors, too. For instance, we have to see if the offer matches the technical parameters mentioned in the share purchase agreement,” a government official said.
Minister Chatterjee declined to discuss any details but indicated that an announcement on the divestment process could be made tomorrow. The three other ministers, too, declined to comment.
A key question will be whether the price quoted by IOC had met the expectations of the state government, especially the finance department that was hoping to rake in a substantial amount from the stake sale.
A cut-off figure that was being discussed among government officials was Rs 28.80 a share — the rate at which the erstwhile Left Front government had offered the stake to HPL’s existing private promoter, The Chatterjee Group (TCG), in 2005.
“I will be surprised if the government sells below Rs 30 a share,” a source said. But he conceded that the steep losses in HPL in the intervening eight years could not be wished away and the company might be forced to close down if it did not soon find an investor with deep pockets.
If the IOC bid is accepted, TCG will have the option to match the price.