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HPL to raise $50m foreign debt

Calcutta, Dec. 18: Haldia Petrochemicals (HPL) plans to raise $50 million or about Rs 200 crore through the external commercial borrowing (ECB) route to finance its ongoing expansion plan.

The money will be part of Rs 400 crore being raised via debt for Project Supermax, which will increase capacity by 30 per cent. The project cost has escalated to Rs 840 crore from the estimated Rs 770 crore because of delays.

The ECB plan and a domestic rupee loan will raise Rs 200 crore each, while the rest will come from internal generation.

The HPL board, which met in Delhi today, discussed the progress of the project and the fund-raising plan. The management hopes to complete the expansion of the naphtha cracker plant from 520,000 tonnes to 670,000 tonnes by October 2008.

The Chatterjee Group (TCG), one of the principal promoters in HPL along with the Bengal government, has blamed the management for the delay which has led to a potential loss of Rs 1,000 crore.

The HPL top brass, however, held the shortage of skilled manpower at the global level responsible for the delay by the project’s Japanese contractor.

Neither TCG nor the government would comment on today’s proceedings.

The two warring promoters will resume their long-drawn legal battle in the Supreme Court on January 7.

During the first eight months of 2007-08, the company reported a marginal increase in gross sales, from Rs 5,300 crore last year to Rs 5,500 crore this year.

However, profit before tax slumped from Rs 450 crore in April-November 2006-07 to Rs 325 crore this fiscal.

Apart from a sharp jump in naphtha prices — it went up from $550 a tonne in April to $840 in tandem with a rise in international crude price — the management said the hardening of rupee was one of the reasons for the drop in profit.

The Bengal government’s nominee on the HPL board, finance secretary Samar Ghosh, stepped down at the board meeting today.

Subrata Gupta, executive director of the West Bengal Industrial Development Corporation (WBIDC), joined the board in his place. The Bengal government holds its stake in HPL through the WBIDC.

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