The Telegraph
Thursday , January 16 , 2014
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IOC formula for Haldia Petro

Search for solution

Calcutta, Jan. 15: Indian Oil Corporation (IOC) is in favour of a four-way dialogue involving the Bengal government, The Chatterjee Group, the lenders and itself to resolve the ownership tangle in Haldia Petrochemicals Ltd.

The public sector oil retailer is concerned about the sustained erosion in HPL’s net worth because of the delay in the divestment programme initiated by the state government where IOC had emerged the only valid bidder.

Sources said Amit Mitra, the new industries minister of Bengal, was in dialogue with IOC chairman R.S. Butola to end the impasse over the PSU’s bigger role in Haldia.

“Talks are going on informally. IOC is in the race,” a source privy to the matter said.

IOC holds an 8.89 per cent stake in HPL. It agreed to buy another 39.9 per cent from the West Bengal Industrial Development Corporation for Rs 1,700 crore, or Rs 25.10 a share, in the bidding held in October last year.

It is learnt that IOC is worried who will fund the losses for the intervening period, between October 10, 2013 — the day the PSU was announced the lone bidder — and the closure of the deal.

It also wants the state government to continue giving fiscal incentives to HPL till the company turns around.

Besides, IOC expects lenders to write off some part of their loans to make the company viable in the long run.

“Financial institutions should consider restructuring the loan. Their support will be critical even if IOC takes the driver’s seat. For any new project, fresh loans will be required,” said a source.

However, there has not been any official communication between IOC and the WBIDC after October 10, except a letter from the PSU on December 17 where it raised concern about the delay and sought the Rs 20-crore earnest money back if the deal did not go through.

TCG role

IOC, as well the WBIDC, have also realised that TCG had to be part of the entire deal. Earlier, the WBIDC kept the existing private promoter at bay and went on with the divestment programme.

To bring TCG on board, Mitra had met chairman Purnendu Chatterjee on more than one occasion over the last fortnight.

It is learnt that TCG has proposed Chatterjee be made the chairman of HPL to steer the company clear of immediate trouble and till the ownership tangle is resolved.

Sources said TCG was not averse to the idea of IOC coming on board with a bigger role. However, it would not drop the demand for a 15.5-crore block of shares at the crux of the ownership dispute.