The Telegraph
Since 1st March, 1999
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Haldia hurrah, despite tussle

Calcutta, Feb. 25: Braving a legal logjam, Haldia Petrochemicals is set to clock its best-ever performance this year.

The company is expected to record gross sales of Rs 8,300 crore and a profit after tax of Rs 530 crore in the financial year that is about to end.

The estimated figures represent a 24.98 per cent rise in turnover and 76.67 per cent jump in net profit over last year.

If the final figures match the estimates, they will help establish the durability of a turnaround process that began four years ago, before which the company had accumulated losses of as much as Rs 1,020 crore.

The impressive show comes in the middle of a legal tussle between the promoters — The Chatterjee Group and the Bengal government — over control of the company. The case is now pending in Calcutta High Court.

Haldia Petro is also expected to bring down its debt burden from a peak Rs 4,200 crore to Rs 2,200 crore by the end of this year. Failure to tap the market through a public issue — which yields cheaper funds — had saddled the company with a crushing debt burden.

At one point, Haldia Petro’s interest cost had ballooned to Rs 540 crore — the amount has now come down to Rs 290 crore.

Haldia Petro managing director Swapan Bhowmik attributed the turnaround to a buoyant business scenario and management initiatives. “We managed our finances well and ran the business efficiently,” Bhowmik told The Telegraph.

With a robust cash flow, the company is planning to repay loans of Rs 425 crore to financial institutions soon.

The current air of confidence is a far cry from the days when the company’s plants were shut down because it could not afford to buy raw material. The plant is now running at 100 per cent capacity.

The company has also undertaken a Rs 675-crore project to expand capacity. However, for further expansion, Haldia Petro will need to tap the market, before which the wrangle with the government will have to be settled.

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