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Bengal may review pact with Haldia Petro

Indrani Dutta

"At a time when the promoters, along with IOC needed to talk in one voice before HPL's lenders and present a cogent restructuring package, things are getting delayed with Mr Chatterjee refusing to divest his holding.''

KOLKATA, April 16

ON days when most industries downed their shutters, Haldia Petrochemicals Ltd (HPL) continued to operate at 100 per cent capacity. But uncertainty is looming large on the horizon of West Bengal's harbinger of industrial revival.

After a planned shutdown (which was made to coincide with an acute raw material shortage) last week, HPL has resumed production.

But with little hope of the promoters' issues getting resolved fast, one of the country's finest petrochemical plants is tottering for want of funds.

"We will have to throttle production soon to avoid another shutdown,'' a source told Business Line.

There is a hand-to mouth position regarding funds flow and there is little scope for optimism on this count.

Indian Oil Corporation (IOC), which had appeared as HPL's white knight, is asking for its pound of flesh and Mr Purnendu Chatterjee, has not relented so far.

And now, there are indications that the State Government, which was always in favour of roping in IOC as a equity partner in HPL, is turning the heat on its erstwhile blue-eyed boy.

"The State Government wants to reopen its agreement which it signed with Mr Purnendu Chatterjee on January 12,'' sources said.

(The agreement assured the NRI funds manager 51 per cent holding in HPL equity on fulfilment of certain conditions, which Mr Chatterjee has failed to meet.)

Though it was thought that HPL's financial travails would soon be over with the imminent entry of IOC, things do not appear so smooth anymore.

"At a time when the promoters, along with IOC needed to talk in one voice before HPL's lenders and present a cogent restructuring package, things are getting delayed with Mr Chatterjee refusing to divest his holding,'' sources said.

According to sources, IOC was not willing to have such a composition of HPL's board as would become a hindrance in the running of the company.

Currently, the 16-member HPL board has three representatives of Chatterjee Petrochem (Mauritius), three of the West Bengal Government, two members from the Tatas with the remaining members (barring the Chairman and the MD) representing the banks and FIs who together have a Rs 4,000-crore exposure to HPL.

Referring to the company's predicament, sources said that the crisis has come at a time when the polymer market was good and the company was eyeing a Rs 1,000-crore increase in its turnover to touch Rs 3,400 crore in fiscal 2003.

Sources said that by June, another round of payment would have to be made to prevent the company being branded as a non-performing asset.

In March this year, it paid Rs 100 crore to the banks and FIs towards settlement of its dues since October 2001.

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