Das: New horizon

Calcutta, Jan. 18: The industrial resurgence in Bengal seems to have rubbed off on Haldia Petrochemicals Ltd (HPL), the state’s showcase project. The petrochemical company is set to announce a maiden dividend for its shareholders this fiscal.

HPL, which was on the brink of bankruptcy and closure three years ago, staged a dramatic comeback at a time when its two principal promoters, the Bengal government and The Chatterjee Group (TCG), were locked in a bitter legal battle at the company law board.

HPL is expected to close the year with an estimated gross turnover of Rs 7,000 crore and a net profit of about Rs 500 crore.

Even though the profit figure will be lower than the previous fiscal as international polymer margins remained depressed due to high prices of crude oil, the company has decided to pay dividends.

Chairman Tarun Das told The Telegraph that the prospects looked brighter and operationally the company was doing good.

“I am happy with the performance. We may even consider a dividend. However, the board will take the final decision,” Das said.

This is a far cry from the days when the company made news for all the wrong reasons.

HPL had an accumulated loss of Rs 1,057 crore at the close of fiscal 2003 due to high interest costs. Its net worth was on the verge of being wiped out then and the spectre of slipping into the BIFR as a sick company was looming large.

Under Das’s leadership, the company had approached the corporate debt restructuring (CDR) cell where the debt and equity of HPL were restructured.

After going commercial in August 2001, it had suffered losses in two consecutive financial years. HPL made its maiden profit of Rs 134 crore in 2003-04.

In late 2004, the company partially fulfilled the CDR commitment of Rs 600 crore through internal accruals and capital infusion by TCG.

The reduction of interest costs as well as the upswing in the global petrochemical cycle also helped the company turn around.

Buoyed by a strong domestic demand, the company is increasing its capacity by 20 per cent at an investment of about Rs 600 crore. The project will be funded mainly through internal resources.

The expansion is likely to be completed in 15 months when HPL will take a shut down.

The company had earlier charted a much bigger expansion plan by raising money through an initial public offering.

Although the proposal was mooted long back, the company could not proceed since principal promoters got into a bitter fight over the inclusion of Indian Oil Corporation as the fourth partner in the company. While the legal battle shows no signs of abating, it seems business as usual for HPL. The first dividend payout is definitely a signal towards that.