| loan levers
Calcutta, Sept. 28: Banks and financial institutions will decide on participating in the corporate debt restructuring exercise of Haldia Petrochemicals (HPL) after evaluating the ‘flash report’ to be tabled by Industrial Development Bank of India (IDBI) within a week.
Sources said the report (a quick summary) will give the promoters and lenders an idea about the kind of restructuring package that is in the offing for the company.
“Based on the report, banks and financial institutions which have given loans to HPL will go to their boards seeking permission for the concessions they can offer. If they do not agree with the report, the restructuring will be delayed further,” said a senior HPL official.
When contacted senior officials of State Bank of India said, “We are waiting for the report. After evaluating the report we will decide whether to participate in the debt revamp.”
Once the report is accepted by promoters and lenders, the company will be referred to the corporate debt restructuring cell of the Reserve Bank of India. “The negotiations will begin after that,” said the official.
Broadly, the report will touch upon four major areas — promoters’ contribution, debt equity ratio, reduction in interest rate and re-working of the repayment schedule.
“We have heard that IDBI will ask HPL owners to invest Rs 500-700 crore as fresh equity,” sources said.
The Haldia Petro management, in its proposal submitted to IDBI, wants debt restructuring to be restricted to Rs 468 crore.
Under the package submitted to banks and financial institutions, the promoters have agreed to invest Rs 468 crore. Of this, Rs 200 crore will come from Gail and the remaining Rs 268 crore will come from Purnendu Chatterjee’s The Chatterjee Group. Gail has decided to pick up 10 per cent stake in the company.
Officials said Purnendu Chatterjee is open to the idea of bringing in the Rs 107 crore that is stashed away in an escrow account and not yet converted into equity.
The present equity of the Rs 5,170-crore Haldia Petrochem is Rs 1,153 crore. The Bengal government has given Rs 540 crore, The Chatterjee Group Rs 433 crore and the Tatas Rs 180 crore.
The management has paid interest to all creditors till June 30. The company’s earnings before interest, depreciation and tax (EBIDT) stands at Rs 50 crore per month since June. However, sales have been sluggish during this month. It has a 65 per cent market share in the eastern region and 24 per cent if measured on a national scale.