Calcutta, Oct. 30: Uttam Kumar Basu, a Mangalore Refineries and Petrochemicals’ former managing director who had worked for Indian Oil Corporation earlier, is tipped to become the MD of Haldia Petrochemicals Ltd at a time IOC is expected to buy the government’s stake in HPL.
Basu will replace Sumantra Chowdhury, a former Bengal cadre IAS officer whose term as MD of HPL will end tomorrow.
Basu is expected to take charge at a time HPL is going through a phase of transition with the Bengal government deciding to exit the company by selling its stake.
Basu spent most of his career at IOC before joining MRPL a few years ago. A chemical engineer from Jadavpur University, he had assisted another public sector firm, ONGC, after formally retiring from MRPL in 2012.
Industry observers said the choice of Basu could be a masterstroke by the Mamata Banerjee government before pulling out of HPL.
Industries minister Partha Chatterjee is now the chairman of HPL.
Being an old PSU hand with strong ties with IOC, Basu could tap his good equation with the petrochemical giant if it finally gets management control of HPL, industry observers said.
“Even before IOC’s impending entry into the company, HPL will have an MD the petroleum giant would be comfortable working with. It would not be far-fetched to say IOC will have de-facto control of the firm even before acquiring its shares,” an observer said.
However, there is still a question mark on whether IOC will finally get the state’s 39.9 per cent share in HPL.
The Chatterjee Group (TCG), the existing private promoter of HPL, has the right of first refusal on the government shares.
TCG has time till November 9 to decide whether to exercise the right and pay around Rs 1,700 crore, or Rs 25.10 a share that IOC has agreed to pay following a competitive tendering process where the PSU was the sole valid bidder.
The industry observers said Basu would be a good choice, given his wide experience in the petrochemical industry even if IOC does not get the government’s stake.
Another section of the industry, however, said Basu would face a tough challenge despite his high credentials.
“HPL does not have enough cash because of sustained losses it has suffered over the years. It can’t buy raw materials. As the plant can’t be run to its full capacity, HPL is running up losses of Rs 2 crore a day,” an observer said.
He said current MD Chowdhury had done a “commendable job” by running the plant without any disruption during his 16-month tenure, helping the state get good value for its shares.
Before he joined, HPL had faced 13 shutdowns in one year. Chowdhury received several extensions as he was found to be actively working with all stakeholders, including financial institutions and employees, to keep the plant afloat.