The Telegraph
Since 1st March, 1999
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Purnendu key to Haldia Petro debt recast

Calcutta, July 18: The promoters of Haldia Petrochemicals (HPL) have submitted a fresh Rs 468-crore debt restructuring proposal to the corporate debt restructuring (CDR) cell of the Reserve Bank of India (RBI).

The promoters have agreed to sign an agreement with the banks and financial institutions on the issue. Discussions on restructuring will begin next week in Mumbai.

Under the new proposal, Purnendu Chatterjee of The Chatterjee Group, a key HPL shareholder, will pick up equity worth Rs 268 crore, while Gail will pump in Rs 200 crore in exchange for a 10 per cent stake.

The earlier proposal, approved by the Industrial Development Bank of India (IDBI), had envisaged a Rs 700-crore infusion. Gail was supposed to bring in Rs 500 crore — Rs 200 crore as fresh equity and Rs 300 crore through a marketing alliance — and another investor to be found later would have to get Rs 200 crore.

HPL chairman Tarun Das told reporters here today that funds in addition to the Rs 468 crore approved under the debt-recast plan would come from promoters. “If the debt recast requires equity more than Rs 468 crore, the HPL promoters will be able to arrange it. They may join the company as a minority shareholder. We hope the process will be completed within 60 days,” he said. Ratan Tata, whose group is also a key shareholder, will join the HPL board after the recast.

The loan revamp was discussed when Das and Chatterjee met Bengal chief secretary S.. Roy and industry secretary Sabyasachi Sen today.

Everything will now be settled through corporate debt restructuring. We will chip in with more equity if required,” said Chatterjee, who holds 43 per cent in the firm. The Bengal government owns as much, while the Tatas control 14 per cent of the Rs 1,010-crore equity. The company’s debt burden stands at Rs 4,200 crore.

Asked if Purnendu will wield management control after he puts more money into HPL’s equity, Das said: “Management control is not the issue at present. Haldia Petrochem will become a board-managed company.”

Sabysachi Sen, the state commerce and industry secretary, said after the meeting that the debt restructuring will focus on four areas — part-conversion of debt into equity, lowering interest rates, a moratorium on principal repayment and infusion of fresh equity.

Das said Haldia Petrochemicals was on course to break even in the current financial year. “Last year, we notched up earnings (before depreciation interest and taxes) of Rs 340 crore. In the current financial year, we will be able rack up that figure to Rs 600 crore.”

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