| over to the money managers
New Delhi, Aug. 8: The board of directors of Calcutta-based Haldia Petrochemicals today cleared the corporate debt restructuring process and set a 90-day deadline for its completion.
“The promoters and the management will have a series of discussions with the financial institutions and banks in order to complete the debt restructuring process,” HPL chairman Tarun Das told The Telegraph after the board meeting at the capital.
“The debt restructuring process will lay down new equity and debt structures, bring down the interest rate and determine how much loan should be converted into equity amongst various other revisions. HPL will then have a new and favourable balance sheet,” he said
HPL is currently saddled with a debt of Rs 4,200 crore. It has an equity base of Rs 1,153 crore. Earlier this year, the promoters of Haldia Petrochemicals had submitted a Rs 468-crore debt restructuring proposal to the corporate debt restucturing cell of the Reserve Bank.
Under the new proposal, Purnendu Chatterjee of The Chatterjee Group (TCG) which currently holds a 43 per cent stake in HPL would pick up equity worth Rs 268 crore, while Gail India would pump in Rs 200 crore.
Chatterjee has already pumped in Rs 107 crore into an escrow account but it has not been converted into equity yet.
Under the plan, Gail would pick up a 10 per cent stake after a Rs 200 crore capital infusion.
Das said, “HPL has pre-tax earnings of Rs 600 crore this fiscal against Rs 300 crore last year. For 2004-05, we forecast that this will touch Rs 1,000 crore. The company is really doing well.”
Allaying rumours that he would step down as chairman of the company, Das said, “Why should I quit when the company is performing so well'”
Das said that if required the existing shareholders would chip in with more funds.
Out of HPL's equity base of Rs 1,153 crore, the Bengal government has contributed Rs 540 crore while TCG and the Tatas have pumped in Rs 433 crore and Rs 180 crore respectively.
The Industrial Development Bank of India (IDBI), the largest lender to the company, had earlier granted an interim restructuring package to the company under the terms of which the company was to have cleared the interest of the lenders till June 30, 2002. HPL has already cleared interest till March 31, 2002. The interim package expires on September 30, 2003.
Das said “the company will be completely board- managed”. Earlier the TCG officials said Chatterjee was not keen to hand over management control of the company to an outsider.
HPL, which enjoys a 63 per cent market share in the east and 23 per cent nationally, hopes to bring down its debt-equity ratio after the restructuring to a little less than 2: 1 from the current level of 4.5:1.
HPL officials said, “We are working on permutations and combinations to lower the debt quantum as the company cannot sustain such high interest rate. It is only then that a new shareholding pattern will emerge.”