Chatterjee: Mulling options
Calcutta, Dec. 17: The board of Haldia Petrochemicals will meet once again on December 24 to decide on the possible routes through which funds can be raised to improve the financial health of the company.
Bengal commerce and industries minister Partha Chatterjee today said the board would weigh options such as the conversion of debt into equity and a rights issue to mop up funds and pull back the company from the brink of being declared sick before the Board for Industrial and Financial Reconstruction (BIFR).
“In today’s board meeting it was discussed how funds can be organised and how to prevent the company from being reported to the BIFR. We have taken the views of all stakeholders. Another meeting will take place on December 24 to decide on how to raise capital and we are hopeful of a solution,” Chatterjee, who is the chairman of HPL, said.
Today’s meeting was attended by TCG chairman Purnendu Chatterjee and his brother, who are both directors of the company, along with commerce and industries secretary C.M. Bachhawat, WBIDC managing director Krishna Gupta and HPL managing director Uttam Basu.
In March 2012, the HPL board had discussed the conversion of a part of HPL’s loan into equity to reduce the company’s debt burden and improve its net worth. The move is estimated to infuse Rs 128 crore into the company.
The conversion of debt into equity was part of a restructuring programme approved by HPL’s lenders in 2004. But the conversion could not take place because the promoters — TCG and the state-run WBIDC — went to court.
Though the Supreme Court had cleared the way for the allotment of shares to the lenders, Purnendu Chatterjee had opposed the conversion. TCG wanted the WBIDC to deal with the transfer of a contentious block of 15.5 crore shares, which would determine the ownership of the company before the allotment to the lenders.
The board may also consider a rights issue, which will infuse additional funds without altering the shareholding pattern. The minister said all options were being considered and the final decision could be taken on the Christmas eve.
HPL is losing Rs 2 crore every day and the peak net worth is likely to be fully eroded soon. The firm’s accumulated loss is around Rs 1,800 crore.
Chatterjee said the plant was running at 60 per cent of its capacity. leaving HPL with no cash to buy raw material naphtha after the payment of dues. He added that the company would conduct an audit to probe any irregularity in the purchase of naphtha and its impact on the balance sheet.
“A report is expected to be prepared by the audit committee within a month,” he said.