The Telegraph
Thursday , March 6 , 2014
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Purnendu set to take charge of HPL

Calcutta, March 5: The warring founding promoters of Haldia Petrochemicals Ltd — The Chatterjee Group (TCG) and the Bengal government — has decided to bury the hatchet with the former soon taking over the management of the state’s showcase industrial project, The Telegraph has learnt.

Representatives of TCG and the state told lenders in Mumbai today that the contours of the resolution over ownership and management control would be made public soon after the general elections.

The board of HPL will meet on March 10 where Purnendu Chatterjee, chairman of TCG and the major private shareholder, is tipped to be elevated as the chairman of the Rs 8,000-crore company.

The company has been without a chairman after Partha Chatterjee, the former industries minister and chairman of the West Bengal Industrial Development Corporation (WBIDC), stepped down from the post on December 26.

It can be assumed that TCG will call the shots in HPL if Purnendu Chatterjee becomes the chairman.

In the one-and-a-half decade of existence of the Haldia-based manufacturer of polymers, Chatterjee managed to get control thrice before, although for short stints.

He has not been able to actively manage the company because of strife with the erstwhile Left Front regime and the present Mamata Banerjee government.

But PC, as he is known in corporate circles, will have his task cut out as HPL is heading towards the Board for Industrial and Financial Reconstruction (BIFR) with a negative net worth of around Rs 500 crore following sustained losses.

It is learnt that C.M. Bachhawat, additional chief secretary in charge of industry, and WBIDC managing director Krishna Gupta spoke in unison with the TCG chairman at the meeting today and sought help from the lenders to tide themselves over the crisis till May.

Both the promoters indicated that TCG would eventually buy out the shares of the state government to reach a resolution. They also hinted at a fresh infusion of funds and the withdrawal of court cases.

Banker, who have lent over Rs 4,000 crore to HPL, indicated they would discuss the proposal for a fresh loan internally before taking a final call. They reminded the promoters about the need to convert part of the loan into equity for increasing the net worth. A proposal to re-value the land assets of HPL to shore up its net worth also came up at the meeting.

However, a bid from Indian Oil Corporation to buy out the government’s stake in HPL still stands valid. Experts say unless the navaratna PSU calls off the bid or it is co-opted as a joint promoter with TCG, Chatterjee’s efforts could end up in a legal tangle. Indian Oil had earlier indicated that it was agreeable to an equal joint venture with TCG, making Haldia Petro a board managed professionally run firm.

IOC had emerged the sole valid bidder in the divestment process initiated by the state government earlier this year, offering to buy at Rs 25.10 a share. But the government could not conclude the deal because of various court cases.

It is to be seen whether Chatterjee agrees to match the price as a share sale at anything less may not be politically palatable for the Mamata Banerjee government.

Chatterjee, in a letter to the state government earlier this year, had said he was willing to buy the state’s 52 crore shares at Rs 3-4 apiece while reiterating that the crucial block of 15.5 crore shares belonged to him as it was sold to TCG in 2002.

The strife over the 15.5 crore shares that decides the control of HPL has been the bane of the company over a decade. The WBIDC had so far claimed the block to be its own and offered to sell it to IOC.

However, the two warring factions seem to have come closer over the last three months after Amit Mitra took charge of the industries department. There also seems to be a feeling among the top bureaucrats that the dispute needs to be settled once and for all and the state must make an exit at any cost before the company slips into the BIFR.