Date:01/04/2006 URL: http://www.thehindubusinessline.com/2006/04/01/stories/2006040104530200.htm

Back HPL: Bengal to fix price above Rs 28.80 a share

Our Bureau

To make `give or take' option to the Chatterjee Group

The CLB formula
The move follows the CLB formula under which The Chatterjee Group was not to contest the Rs 150-crore share allotment to IOC and the Rs 135-crore to IDBI under the corporate debt restructuring package.
In return, TCG was to be allotted equity shares to increase its shareholding to 51 per cent.

New Delhi , March 31

In order to amicably resolve the ongoing tussle between the West Bengal Government and The Chatterjee Group (TCG) with regard to Haldia Petrochemicals Ltd, the Company Law Board (CLB) Chairman, Mr S. Balasubramanian has asked the State Government to work out the compromise formula.

The State Government indicated to the Board on Friday that WBIDC will fix a price beyond Rs 28.80 per share with the option to the TCG to either buy the entire shares of WBIDC at that rate or sell its entire holding to WBIDC at the same rate.

TCG seeks time

The TCG has sought time till April 12 to respond to the State Government's proposal. This move by the State Government follows the compromise formula suggested by the CLB Chairman recently, under which The Chatterjee Group was not to contest the Rs 150-crore share allotment to Indian Oil Corporation and the Rs 135-crore to IDBI under the corporate debt restructuring package.

In return, TCG was to be allotted equity shares to increase its shareholding to 51 per cent. The whole dispute over the control of HPL came to the forefront in August 2005 when TCG moved the CLB over West Bengal Industrial Development Corporation's decision to allot 7.5 per cent stake of HPL to Indian Oil Corporation. TCG, which claimed that it has about 53 per cent stake even after the allotment, argued that it had the first right of refusal to the shares.

The West Bengal Government has about 36 per cent stake in HPL. If the allotment does take place, the shareholding of TCG and its associates will come down to 44.23 per cent from 48.94 per cent and will lose the management control.