The Telegraph
Tuesday , January 7 , 2014
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Haldia Petro lenders back Indian Oil

Mitra: Seeking solution

Calcutta, Jan. 6: Haldia Petrochemicals’ lenders have unanimously backed the induction of Indian Oil Corporation as the strategic partner in the company during their first interaction with industry minister Amit Mitra today.

Lenders have urged Mitra, who took over the industry portfolio two weeks back, to look for joint action involving the government, Indian Oil (IOC) and financial institutions to help beleaguered HPL.

Financial institutions, who have more exposure to HPL than all promoters put together, however, declined to provide immediate relief in terms of fresh loans unless the divestment drama ends, providing a clear picture of management control and ownership.

In a top-level meeting between Mitra and all the financial institutions this afternoon, the lenders appreciated the commitment showed by the state government in trying to solve the crisis at HPL.

“At the end of the meeting, I asked everyone present if they are with the state government in HPL. You will be happy to know that they all vociferously agreed to be with us,” Mitra said after a 75-minute meeting at Protiti, the office of WBIDC.

The Mamata Banerjee government’s effort to sell WBIDC’s stake in HPL to IOC is stuck in a legal quagmire. The existing private promoter of HPL, The Chatterjee Group, has taken the state to court over the stake sale. Sources said Mitra would meet Purnendu Chatterjee, chairman of TCG, in the next few days.

Apart from Mitra, additional chief secretary in charge of industry C.M. Bachhawat, WBIDC managing director Krishna Gupta and HPL managing director Uttam K. Basu were present at the meeting with the lenders.

Mitra said some of the top lenders of HPL such as the State Bank and IDBI had sought a meeting with the state government, which decided to invite all other lenders to HPL as well.

“They appreciated the fact that the state has given a loan of Rs 100 crore to HPL despite severe financial crunch. It is putting your money where your mouth is,” Mitra added.

Institutions were to give Rs 400-crore fresh loan to HPL following the state’s contribution. The minister said Rs 340 crore has come in so far. “Some of the lenders in the consortium have not disbursed the loan. I request the rest to put in the balance amount,” he said.

Mitra said HPL was going ahead with the rights issue as decided in its board meet on December 24. The Rs 1,300-crore issue would bring in cash for Haldia’s survival till the stake sale was completed.

The company does not have enough cash to buy raw material naphtha and is operating at 45 per cent capacity.