The Telegraph
Since 1st March, 1999
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Haldia Petro debt recast in 20 days

Calcutta, Sept. 10: Loans to Haldia Petrochemicals (HPL) will not turn into a non-performing asset (NPA) in the books of financial institutions and banks by September 30, according to the company’s chairman Tarun Das.

“We will not be an NPA and everything will be right by October 1,” said Das, who is also the director general of Confederation of Indian Industry (CII). He was in the city to address the Indian Chamber of Commerce (ICC) on competitiveness of the country’s industry.

Das, upbeat about Haldia Petrochem’s operations, said the entire exercise of equity recast and debt restructuring will be completed by the end of this month.

If the company fails to pay interest or if its debt pile is not reworked by the month-end, money lent to Bengal’s show-case industrial venture will turn into an NPA. Banks and financial institutions have together sunk Rs 4,200 crore in the Rs 5,170-crore project.

Das said several rounds of talks have been held with financial institutions and banks over the past few days.

“They have understood the situation and are more co-operative now. We expect the debt-restructuring package to go through within the next 20 days,” he added.

The HPL chief ruled out any possibility of getting Indian Oil Corporation (IOC) as the fourth equity partner with management control.

“That door is closed forever. There is no rationale of handing over the management control. It can only join HPL with a smaller stake in the equity. Even this has been made clear to the company. However, we do have a cordial relationship with IOC as a supplier of naphtha,” he added.

HPL’s control, he said, will remain in the hands of Purnendu Chatterjee of The Chatterjee Group, who has invested $ 145 million.

“It is a huge foreign direct investment for Bengal,” he said. The state government signed an agreement on January 12 to transfer more than 51 per cent of Haldia Petrochem’s equity to the TCG boss.

Gail (India) Ltd, ready to invest Rs 200 crore in HPL’s equity and another Rs 300 crore in a marketing alliance, will kick off a due diligence of the project soon.

An additional Rs 500 crore, Das said, will be infused as working capital against long-term naphtha credit. A handful of international companies have evinced interest in providing HPL long-term naphtha credit. “An agreement with some of them will be reached soon,” he said.

Speaking at the ICC seminar, Das said Indian economy is not alone in finding the going tough at this point of time. “It is a tough time for the entire world,” he added.

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