Differences between the Government of West Bengal and Tata Sons on the shareholding structure of Haldia Petrochemicals (HPL) came out into the open today. According to the state government, the Tatas will continue as shareholders in the Rs 5170 crore project. This contradicts Tata group chairman Ratan Tata's statement at the Telco AGM on August 14, that "This (HPL) is not the business we will continue to be in".
The confusion over the Tata stake in HPL emerged when West Bengal's finance minister, Asim Dasgupta, who sat in with industries minister Nirupam Sen on an hour-long meeting between West Bengal chief minister Buddhadev Bhattacharya and Ratan Tata, said the Tatas would continue to be a partner in HPL.
Industry sources said they were sure Tata would not back down from the AGM statement in view of the financial status of Telco and other Tata companies. Later in the evening, a Tata group spokesman clarified that "general discussions were held on the Haldia Petrochemicals project but the investment issue was not discussed".
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Dasgupta, however, told the press that the issue of IOC's participation as the fourth promoter in HPL was also discussed at the meeting.
Tata himself refused to make a statement after he emerged from the meeting with the chief minister about what transpired at the meeting. "We held general discussions about the partnership status in HPL," was all he would say.
The Government of West Bengal holds 43 per cent in HPL -- a level that is much above the normal 24 per cent stake held by the government in joint venture companies.
Sources said efforts to get a fresh investor into the heavily-indebted HPL has been stalled because of the high government stake, which has raised fears of government interference at all levels. If the government stake is reduced to 24 per cent or less, the non-government promoters would be in a position to run HPL their own way, as they would have the necessary holdings even to pass special resulutions.
Today's meeting between Bhattacharya and Tata can be seen as a prelude to the board meeting of HPL scheduled for August 31, in which the three promoters -- The Chatterjee Group (TCG) of Purnendu Chatterjee, the West Bengal government and Tata Sons -- are expected to discuss the partnership status and revival strategy for HPL and Tata Sons unwillingness to continue as promoter in the long run. TCG also holds 43 per cent in the company while Tata Sons holds 14 per cent.
HPL started commercial production only on August but was suffering heavy losses due to spiralling naphtha prices and heavy interest burden. While a proposal on restructuring company's over Rs 4000 crore debt is lying with the financial institutions (FIs), the promoters are also trying to rope in another equity partner to ease the debt burden.