Calcutta, Sept. 24: Haldia Petrochemicals Limited (HPL) will seek a floating interest rate from Industrial Development Bank of India (IDBI).
“IDBI has cleared the debt restructuring proposal and we are currently going through it. But we are open to further negotiations and may seek a floating rate of interest,” HPL sources said. HPL will submit its observations on the debt-restructuring scheme within the next seven to 10 days, sources added.
“At present, most of the financial institutions and banks are offering floating interest rates. HPL, being such a huge project would also like to enjoy the benefit of a floating interest rate,” HPL officials said.
The Chatterjee Group, which is managing the company for the last five months, is also on the look out for a new managing director. “We are not in a hurry and will run it on our own for now. We will take time to find a managing director for the company.”
The debt-restructuring package requires the promoters to bring in Rs 700 crore as fresh capital. On their part, the FIs will give their consent to the conversion of debt worth Rs 400 crore into equity and preference shares, and a reduction of interest from an average of 14.5 per cent to around 11 per cent.
The package also includes conversion of accrued term-loan interest of around Rs 350 crore into long-term debt. As a result, the debt equity ratio of the company will improve from 5.2:1 to 2:1, while the interest outgo will decline from Rs 450 crore to Rs 300 crore.
The consortium led by IDBI has set November 30 as the deadline for HPL’s promoters to bring in Rs 500 crore as fresh capital. An additional sum of Rs 200 crore has to be brought in by February 2003. The banks and financial institutions have an exposure of nearly Rs 4,200 crore in the Rs 5,170-crore company.
HPL chairman Tarun Das said HPL is in talks with parties in India and abroad who are keen to provide long-term naphtha credit to the company. “There are six such parties with whom we are currently holding talks. We are confident of clinching a deal soon.”
“The problem at HPL is over,” Bengal chief minister Buddhadeb Bhattacharjee said at Writers’ Building today.
Gail has decided to pick up a 10 per cent stake in HPL for a consideration of Rs 200 crore. They have also decided to enter into a Rs 300-crore marketing tieup with HPL. “Gail has appointed Ernst & Young to carry out a due diligence of the company. The firm will submit its report within another three weeks. The PSU will also enter into a marketing tieup with HPL soon,” a senior HPL official said.