Calcutta, Aug. 20: The lenders of Haldia Petrochemicals ' IDBI, State Bank of India, Life Insurance Corporation of India and IFCI ' want to keep an eye on the company’s cash flow.
At a meeting held on Friday evening, the lenders have asked the company to immediately open a trust and retention account with any bank in India so that the cash flow can be monitored.
According to the corporate debt restructuring package worked out by the lenders, HPL was supposed to open this account in 2002. More than two years have passed but the company is yet to open it.
A trust and retention account manages the cash flow (both pre-construction and post-construction), acts as a paying and receiving as well as a foreign exchange agent, and provides escrow facility ' both cash and security.
Bankers say such an account addresses the concerns of all financial institutions involved in the project.
The lenders also discussed the financial health of the company as well as its future prospects, sources said. HPL had registered a net profit of Rs 750 crore in 2004-05 and hopes to double it this fiscal.
The promoters’ issue also came up for discussion at the meeting, which was attended by five directors from the lenders and representatives of the Bengal government and The Chatterjee Group.
SBI sources said the lenders were extremely unhappy about the tussle between the Bengal government and Purnendu Chatterjee.
According to sources, during the meeting IDBI expressed concern about the delay in issuing shares worth Rs 136 crore to it as part of the corporate debt restructuring package.
“IDBI feels that even though the company is performing well, the problem between the promoters is acting as a major hurdle to the company’s growth,” sources added.
“IDBI will get its shares once the company law board clears the case pending before it,” senior FI officials said.
Purnendu Chatterjee, one of the principal promoters of HPL, had moved the company law board against the government’s decision to allow Indian Oil Corporation 7.5 per cent stake in HPL for Rs 150 crore.
The Bengal government’s decision not to sell its 36.87 per cent stake to Purnendu further irked the NRI businessman.
CLB had ordered a status quo on the sale of the Bengal government’s stake in HPL to IOC.
A section of the HPL management and the state government feel that Purnendu should go in for an out-of-the-court settlement to resolve the problem amicably. However, there has been no such move yet from Purnendu.