The Telegraph
Thursday , December 13 , 2012
Since 1st March, 1999
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Bengal to tap State Bank to bail out HPL

Calcutta, Dec. 12: The Bengal government has decided to make an urgent pitch to the State Bank of India to save Haldia Petrochemicals Ltd.

Bengal chief secretary Sanjay Mitra will soon meet SBI chairman Pratip Chaudhuri, pleading the country’s largest bank to release a loan as soon as possible.

Mitra will be accompanied by newly appointed industry secretary C.M. Bachhwat and West Bengal Industrial Development Corporation managing director Krishna Gupta, industry minister Partha Chatterjee said today after a three-and-a-half-hour-long board meeting.

“The main topic of discussion today was how to restore the financial health of the company. Our main aim is to keep the plant operative. Purnendu Chatterjee has also said he will make a joint effort with us to bring in funds,” Chatterjee said.

“We are trying to resurrect the corporate debt restructuring committee. I have asked for the relevant documents as to why no meeting of the committee has been held since 2003-04,” he said.

“We need around Rs 1,000 crore. The more we can collect the better.”

The company has been on a sticky wicket financially, losing heavily because of low capacity utilisation.

Unable to buy raw material naphtha to produce polymer, the plant is operating only at 50-60 per cent of the installed capacity.

HPL had earlier pleaded with the SBI-led bank consortium, which provides short- term working capital, to release funds to shore up capacity utilisation. However, banks had turned down the proposal, citing inability of the promoters to resolve differences and infuse equity in the firm.

A leading bank had declined a meeting with HPL and government officials a few weeks back unless the promoters — WBIDC and private partner The Chatterjee Group — came up with a revival plan, including equity infusion.

Chatterjee had disclosed the government’s plan to sell its shares through auction and bring in a partner a year ago. However, the move was officially formalised only a month back.

The WBIDC today informed the HPL board that it had decided to sell its shares through an auction process, the minister said.