GAIL, IOC in fight for Haldia Petro control

Gas major ready to offer Rs 600 crore for reins

A major battle has broken out for Bengal's showcase project, Haldia Petrochemicals Ltd (HPL). Two navaratna public sector enterprises, Indian Oil Corporation (IOC) and GAIL India, have pitched for a controlling stake in the company.

GAIL India has decided to raise its offer for HPL, which had been written off by many following its spiralling debt and accumulated loss, while IOC has submitted a new proposal to the West Bengal government, a promoter in HPL along with The Chatterjee Group (TCG) and Tata Sons.

While GAIL is now ready to dish out Rs 600 crore compared with Rs 200 crore earlier proposed, IOC has offered a comprehensive package totalling Rs 5,700 crore, including Rs 700 equity infusion in HPL and Rs 5000 crore as further investments in petrochemicals in HPL.

Proshanto Banerjee, chairman and managing director of GAIL said: "We are told that Rs 600 crore could be required as fresh capital infusion in the company. GAIL is ready to shell out this much provided proportionate role is given in management of HPL."

GAIL had committed Rs 200 crore with TCG bringing another Rs 268 crore as fresh equity in the restructuring package submitted to the corporate debt restructuring (CDR) cell.

"If TCG is unable to bring in funds, GAIL will mobilise whatever is required. The debt restructuring package is being worked out now and the exact requirement will be known only after that," he added.

GAIL's offer gains in significance as IOC has again shown its interest in the project. IOC has written to the West Bengal government (GoWB) expressing interest to put Rs 700 crore as fresh capital infusion in the company.

Moreover, IOC has lined up whole host of downstream projects which include expansion of polypropylene, polyethylene and cracker units apart from new styrene, synthetic rubber and condensate unit with total investment of Rs 5,000 crore.

IOC had been invited to come into HPL one and half years ago. But talks collapsed on the issue of management control. HPL promoters then began negotiations with GAIL. HPL has now gone to CDR cell which has indicated infusion of fresh funds in HPL on which existing promoters have remained silent.

Nirupam Sen, West Bengal industry minister, said the central government should decide which enterprise should come in as strategic investor. "We have no issue with IOC or GAIL. They may come alone or jointly," he said. Observers feel CDR cell would have last say on this issue. "After all it boils down to what is the fresh capital required and whether TCG or GAIL have enough financial muscle to bring in that. The cell may ask IOC to put in the investment," they added.