The Telegraph e-Paper
The Telegraph
TT Photogallery
Since 1st March, 1999
CIMA Gallary

Gas duo keen on Haldia Petro

Calcutta, May 17: Energy major GAIL (India) Ltd and ONGC Ltd are likely to join the race to pick up the Bengal government’s stake in Haldia Petrochemicals.

Both the “maharatna” public sector giants said they were examining proposals made by the Mamata Banerjee government to offload its 39.9 per cent stake in HPL.

Consultant firm Deloitte has floated tenders seeking expressions of interest (EoIs) from potential investors on behalf of the West Bengal Industrial Development Corporation (WBIDC).

“We are aware of it (EoI). GAIL had been interested in the past. We are now looking at the documents,” GAIL chairman and managing director B.G. Tripathy told The Telegraph from Delhi.

He said the gas transportation major, which is also a large player in the petrochemical business in India, would make a bid if there was a commercial sense to do so.

“If we bid, we will do it alone and not in consortium. We have enough in-house competence,” he said.

Tripathy said the factors that might influence the decision of GAIL included the state government’s policy for the new investor and the financial condition of HPL.

ONGC chairman and managing director Sudhir Vasudeva said the company too was exploring a bid for HPL.

“We are examining this,” Vasudeva said in Calcutta today when asked about a bid for HPL.

The ONGC chairman said he was aware of the ownership dispute between the two promoters. “If it makes sense commercially, we will bid,” he said on the sidelines of a meeting organised by the Bengal Chamber of Commerce and Industry. There is also a likelihood that Mangalore Refinery and Petrochemicals Ltd, a subsidiary of ONGC, may put in the bid. “It is the same group, hardly matters if it is MRPL or ONGC,” Vasudeva said.

Bengal industries minister Partha Chatterjee expressed satisfaction over the reactions of the two PSU firms. “We are committed to auction the government’s share in a transparent manner,” Chatterjee said.

The Telegraph had earlier reported that Indian Oil Corporation and Reliance Industries were exploring the possibility of buying the state government’s share in Haldia.

Yesterday, Calcutta High Court put the sale process under cloud by putting an injunction on the 15.5 crore shares that the WBIDC has put up for sale along with a block of another 52 crore. However, the judgment has been stayed till June 10, the last day for submitting EoIs, effectively allowing the first phase of the divestment process to run.

According to state officials, Justice I.P. Mukerji asked private promoter The Chatterjee Group to approach an appropriate forum and obtain an order in its favour on the 15.5 crore shares by July 15.

The state will be free to sell the block after that if TCG fails to get an order in its favour. TCG had earlier sought injunction on the sale process.

Minister Chatterjee, however, expressed his dismay over the response of TCG.

“There is enough safeguard. First, it can participate in the auction process and bid for the government shares. Second, it has the right to match the highest bid,” he said.

The minister said the court battle and ownership dispute were unlikely to dampen the interest of potential buyers.

“They all know what is what,” Chatterjee argued.

Incidentally, all three public sector energy majors had in the past looked at a negotiated deal to buy into HPL. But IOC already has a beachhead with an 8.89 per cent stake.

The biggest problem plaguing eastern region’s only petrochemical firm is cash in want of which the plant was running at half the capacity, making heavy losses.

Even though the cash-pile available with ONGC, GAIL is sufficient for HPL’s turnaround and expansion, RIL’s strong balance sheet and execution capability makes it a strong contender.

Many believe the player who would be able to buy peace with TCG will be the new investor in HPL.