Calcutta, Nov. 27: Indian Oil Corporation (IOC) has suggested a three-way discussion outside the courtroom to resolve the current stalemate over the ownership of Haldia Petrochemicals.
The public sector maharatna, which emerged as the only valid bidder to buy the Bengal government’s holding in HPL, proposed a meeting involving itself, the Bengal government and The Chatterjee Group, the existing private promoter of the company.
Frustrated with the inordinate delay in various legal fora, IOC has communicated its view to the Mamata Banerjee government.
“The legal process will take its own time. But HPL is fast sinking. A solution must be found through negotiations outside the legal forum. The initiative has to come from the state government,” an IOC official said.
The PSU said it was led to believe by the West Bengal Industrial Development Corporation, owner of a 39.9 per cent stake in HPL on behalf of the state, that the title was clear on the entire block of shares.
The WBIDC had put 67.5 crore shares on the block, including the contentious 15.5 crore shares, through a competitive tender process. IOC quoted Rs 25.10 a share, valuing the government’s stake at Rs 1,700 crore.
Reliance Industries, Cairn India and GAIL (India) Ltd had initially joined the stake sale but later opted out.
Bengal industries minister and HPL chairman Partha Chatterjee said the government was aware of the matter but avoided a direct answer to IOC’s proposal for talks.
State officials said they were wary of the legal trappings. “Talks can always happen. But what if TCG again goes to court with the minutes of the meeting?” they said.
A division bench of Calcutta High Court yesterday sent the matter pertaining to the disputed 15.5 crore shares back to a single bench where the hearing will now continue. Technically, whosoever loses out can approach the division bench and the Supreme Court.
The single bench judge I.P. Mukerji today extended the stay order, which he had issued restraining the state from continuing its share sell process till November 27, for one more day and decided to start hearing of the appeals from November 29.
No to piecemeal deal
IOC said it was wary of picking up the so-called “undisputed” block of 52 crore shares since it would fail to cross the crucial mark of 50 per cent.
“The offer (for sale of shares) document said the sale will fall through in case the entire block is not transferred. If IOC doesn’t get the control of management, the PSU board is unlikely to approve the investment,” a source close to the refiner, said.
A back-of-the-envelope calculation shows if TCG manages to wrest claim on the 15.5 crore shares, Indian Oil’s stake in HPL will then creep up to 49.93 per cent if it manages to buy out financial institutions (7.57 per cent) and the Tata group (2.67 per cent).
The PSU oil retailer is also keeping track of the financial health of Haldia Petrochem. Last week, the shareholders of Bengal’s showcase project reported the company to the Board for Industrial and Financial Reconstruction after the company lost half of its peak net worth.
“In case, the company is reported to BIFR and becomes a sick company, little value would be left for anyone, including the state and TCG. And it would also be difficult for IOC to invest in a sick company at the present value,” the source added.
