Financial Daily from THE HINDU group of publications
Wednesday, Aug 11, 2004
Industry & Economy - Petroleum
GAIL (India) keen to pick up equity stake in HPL
Kolkata , Aug. 10
Clearing all doubts, GAIL (India) Ltd has announced that it is still eager to take up an equity stake in Haldia Petrochemicals Ltd (HPL) for which it is willing to invest whatever funds are required.
At a press conference on Monday, Mr Proshanto Banerjee, Chairman and Managing Director of GAIL, said that his company's investment proposal in HPL depended on the discretion of the management of the petrochemical company.
However, he clarified that GAIL had sought clearance from the Public Investment Board (PIB) of the Union Government for an equity investment of Rs 332 crore in HPL.
As per the CDR (corporate debt restructuring) package of HPL, Rs 600 crore of fresh equity was supposed to be chipped in by the end of 2004. Of this, Rs 143 crore was already invested by The Chatterjee Group (TCG).
GAIL's share of equity participation is worth Rs 332 crore.
"PIB is supposed to clear our proposal by September this year. We will invest that amount unless the HPL management changes its proposal," Mr Banerjee said. In this context, he mentioned that GAIL's proposed investment plan in HPL had changed on several occasions earlier following requests from the HPL promoters.
"In the last two years, the HPL management had sent us three to four sets of investment proposals. The latest proposal was sent by the lead banker, IDBI, which fixed our equity investment at Rs 332 crore," he said.
Asked about the equity stake that GAIL will have in HPL, Mr Banerjee was non-committal.
"We were looking at 16-17 per cent stake but as of now nothing has been finalised. We are open to accept even a lower stake," he said.
Mr Banerjee added,"If TCG has brought in the money, the West Bengal Government will have to advise us what the HPL management wants from us now."
Meanwhile, it appears that the HPL management is not too keen on GAIL's equity participation as it can raise the necessary equity (as per CDR) through its proposed initial public offering.
However, reacting to Mr Banerjee's statement, HPL officials said negotiations were still on with GAIL.
At HPL's last press conference, Mr Tarun Das, Chairman, said the company would talk to GAIL about their proposed equity participation before finalising the size of the IPO.
Joint venture for synthetic rubber
IN a joint venture with HPL, GAIL is setting up a styrene butadiene rubber plant at Haldia at an estimated cost of Rs 538 crore.
According to Mr Proshanto Banerjee, Chairman and Managing Director of GAIL, a detailed feasibility report has already been prepared and was currently being evaluated by both companies.
However, the equity participation is yet to be finalised.
"In all probability, it will be a 50:50 joint venture," Mr Banerjee said.
India currently imports SBR.
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