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Haldia Petro board studies need for capital recast

Our Bureau

CALCUTTA, Sept. 6

THE board of Haldia Petrochemicals Ltd (HPL), which met here today, discussed ``key strategic issues.''

Informed sources told Business Line several points including a capital restructuring proposal figured at the meeting which lasted for nearly two hours.

When contacted, Mr. Tapan Mitra, HPL Chairman, said that he was bound by the confidentiality clause and could not divulge anything on the board meeting.

Mr. Richard B. Saldanha, HPL's Managing Director, too was unwilling to comment on the proceedings saying that the company was at a very crucial juncture now and it would not be in its interest to discuss its plans openly.

HPL has been in the news for some time now primarily for one reason - enhancing its equity capital; the immediate options being a higher stake by the Tatas who now hold only 7.3 per cent and having Indian Oil Corporation as the fourth partner. IOC, on it s part, is stated to be willing to invest in HPL's equity but its terms are not known.

Adding weightage to such discussions has been the involvement of no less a person than the Chief Minister, Mr. Jyoti Basu. In the past weeks, Mr. Basu has held confabulations with both the Tata Group chairman, Mr. Ratan Tata, and the IOC Chairman, Mr. M. A. Pathan. Both these meetings have been hush-hush affairs with almost everyone holding their cards close to their chest.

However, no representative of Mr. Purnendu Chatterjee was present at these sessions. His company, Chatterjee Petrochem (Mauritius) holds a 21.9 per cent stake in the Rs. 1,969-crore equity of HPL. The other 21.9 per cent of the 51 per cent promoters' equ ity is held by the West Bengal Industrial Development Corporation (WBIDC).

However, it is the inability of HPL to tap the capital market to raise the Rs. 969 crores non-sponsors' equity which has now made matters difficult for HPL, regarded by the State government as its icon of industrial resurgence. For Mr. Basu too it is a p et project as he struggled relentlessly for two decades to turn the project into a reality.

But, to complete the project, HPL has had to raise bridge loan for Rs. 969 crores, which added to the debt servicing burden and distorted the envisaged debt-equity ratio of 2:1.

The physical performance of the unit is, however, on an even keel. Mr. Saldanha said that barring the butadiene plant, 100 per cent capacity utilisation had been achieved in all the three polymer plants and the four olefin plants. The captive power plant has also stabilised now, he said. Sales growth, given the over capacity conditions, too is satisfactory.