The Telegraph
Since 1st March, 1999
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Ministries step in to hasten HPL debt recast

Calcutta, March 29: The petroleum ministry and the finance ministry have teamed up to work out a debt restructuring package for the Rs 5,170-crore Haldia Petrochemicals.

The ministries have initiated talks with the Industrial Development Bank of India (IDBI), the lead financial institution, to work out a package for the debt-laden company.

Confirming the move, a senior official of the petroleum ministry said, “We are currently working out the package and it will be a favourable one.”

Company sources said: “The ministries will decide on the fourth equity partner. They are in talks with both Indian Oil Corporation and Gail (India). There is a possibility that both the companies may join HPL in two different forms.”

Meanwhile, IDBI has written to Haldia Petrochem in which it has agreed to relax the interest payment deadline of the company. With this relaxation, the HPL account will not be treated as a non-performing asset till September 31, 2003. This has provided a major respite to the cash-strapped company.

The total exposure of the banks and financial institutions in the company is to the tune of Rs 4,200 crore. The company has paid interest till September 31, 2001.

IDBI will now directly interact with the ministries for the debt restructuring and not with the promoters of the company — the West Bengal government, Purnendu Chatterjee and the Tatas.

Bengal government officials said, “We now want the debt restructuring to happen. We will support whoever comes to bail out the company with funds. Equity infusion in the company is our top concern.”

However, the ministries are yet to set a date when the debt restructuring proposal would be tabled before HPL. “It may happen any moment,” an official in the petroleum ministry said.

Earlier, IDBI had worked out a debt restructuring package for the company in which the promoters were supposed to pump in Rs 500 crore by November 30, 2002, and another Rs 200 crore by February 2003.

Gail (India) was roped in to invest Rs 500 crore in the company – Rs 300 crore through a marketing alliance and the rest Rs 200 crore in the form of equity through acquisition of a 10 per cent share in the company.

Gail signed the marketing alliance but refused to bring in the Rs 200 crore unless the debt restructuring exercise was completed. IDBI on the other hand said that unless Gail brings in the equity the debt restructuring exercise could not be worked out.

Tarun Das, chairman of the company, then approached the finance ministry and the Union petroleum ministry to sort out the problem.

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