Calcutta, Nov. 27: The Gail board, which met today to discuss about their investments in Haldia Petrochem (HPL), has set up an internal committee to interact with financial institutions on HPL’s debt restructuring.
Gail MD Prashanta Banerjee had said earlier this week that they would not invest in HPL unless the financial institutions led by Industrial Development Bank of India (IDBI) restructure the debt. However, Gail has decided to enter into a commercial agreement with HPL for polypropelene. “They are convinced that HPL can produce 2,5000 tonnes of polypropelene and they are ready to sign an agreement for this. This will mean a business of Rs 60-70 crore for Haldia Petrochem,” sources said.
Following Gail’s decision, HPL promoters have approached IDBI for a month’s time. IDBI in its debt restructuring proposal had said that HPL will have to bring Rs 500 crore by November 30. HPL sources said, “We expect the matter to be sorted out within December. Meanwhile, we have kept the FIs and banks posted about the developments. The promoters have also asked for time.”
However, IDBI is yet to get back to HPL promoters. “We are examining the matter now. A decision has not yet been taken,” IDBI officials said.
It may be mentioned here that HPL chairman Tarun Das had hoped to enter into an agreement with Gail within October 30 last. According to the debt restructuring package approved by IDBI, HPL will have to bring in Rs 500 crore by November 30 and another Rs 200 crore by February 28, 2003.
The package says that Gail will make an upfront payment of Rs 200 crore for acquiring 10 per cent stake in HPL. For the remaining Rs 300 crore a special purpose vehicle will be jointly formed by Gail and The Chatterjee Group where Purnendu Chatterjee will have a majority holding.