The Telegraph
Friday , August 31 , 2012
Since 1st March, 1999
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HPL panel to spot investor

Calcutta, Aug. 30: The top agenda of the four-member group of ministers formed to look after the affairs of beleaguered Haldia Petrochemicals is to find a strategic investor.

When asked about the main task assigned to the GoM, headed by Bengal finance minister Amit Mitra, a member of the group said “divestment”.

The other members of the group are former chief secretary and power minister Manish Gupta, panchayat and public health engineering minister Subrata Mukherjee and industries minister Partha Chatterjee.

Chatterjee is also the chairman of the company, the first minister to take up such a post. While Chatterjee has been able to save the company from imminent closure, a long-term solution has so far eluded the top brass.

There are three senior bureaucrats on the board of HPL at present — industry secretary Alapan Bandopadhyay, West Bengal Industrial Development Corporation managing director Nandini Chakravorty and home secretary Basudeb Banerjee.

The state, which has now assumed complete control of the day-to-day management, has put Sumantra Chaudhury, a former additional chief secretary, as the managing director.

HPL has been making losses because of the high interest burden, which has dug into its earnings.

Petrochemical experts believe the company needs a strategic investor with deep pockets as it will be very difficult for a standalone petrochemical plant to survive.

Lenders to HPL have also demanded that the state should find an investor such as Indian Oil Corporation to invest in the company.

Incidentally, the state had promised the lenders earlier this year, while seeking a fresh loan to bail out the company, that it would get a new investor within six months.

At least four months have passed, but the state is yet to even find a road map to identify a buyer.

There are two options before the government. It can sell its equity to a new buyer such as IOC or Reliance Industries by an auction process. Alternatively, the company could raise cash via an IPO.

Purnendu Chatterjee, the private investor in HPL, has opposed the first option. He is understood to be agreeable with the second if the state dilutes its shares. But in either case, the company’s shares are unlikely to fetch good value because of a poor financial condition.

It would be worthwhile to see the suggestion the GoM offers chief minister Mamata Banerjee on HPL.