| Cash comfort
Calcutta, April 27: The finance ministry, looking into the debt restructuring of Haldia Petrochemicals Ltd (HPL), has accepted the firm’s proposal of converting Rs 600-crore debt into equity. It has set aside Gail’s plan that would have required a conversion of Rs 2,000 crore.
Senior finance ministry officials told The Telegraph from Delhi: “The proposal sounds good. We are evaluating it. Negotiations are on. The finance ministry in consultation with the petroleum ministry will come up with a favourable decision for the company.”
However, they did not spell out any time frame within which the exercise will be completed.
Sources said there has been a difference of opinion between HPL and Gail over the conversion of debt into equity. “Gail has now accepted the company’s proposal to convert only Rs 600 crore of debt into equity. This is a positive development in the restructuring process,” senior officials of HPL said.
The company will issue preference shares to the debtors following the conversion.
Gail’s acceptance of the proposal is being seen as a step towards speeding up the debt restructuring of Haldia Petrochemicals, which is saddled with a debt burden of Rs 4,200 crore. Industrial Development Bank of India (IDBI), the lead financial institution, has the largest exposure to the company.
The debt restructuring package of the Rs 5,170-crore company is being handled by the finance and petroleum ministries.
“They will now decide who will be the strategic partner for HPL. However, Indian Oil Corporation has not given the company any proposal suggesting it would like to step into the role. We are holding talks with IOC for naphtha supply,” senior officials of the company said.
Sources, however, said HPL had received some queries from overseas firms interested in becoming a strategic partner. “They had shown some interest but we have not received any concrete proposal,” company officials said.
HPL, which has captured more than 60 per cent of the market in the east, has achieved an EBDIT of Rs 350 crore for the year ended March 31, 2003 as against Rs 70 crore in the corresponding previous period.