Haldia may buy L&T stake in power JV

This is subject to the lenders to the project clearing a restructuring plan for HPL's liabilities of Rs 4,704 crore.

The corporate debt restructing (CDR) cell has already recast Rs 40,000 crore worth of stressed assets of the banking sector.

HPL Cogeneration runs a 116 mw naphtha-fired captive power plant for HPL.

"HPL has proposed in its restructuring proposal that it plans to buy out the L& T stake in the power project in the next two years after the restructuring," senior institutional sources told Business Standard.

Haldia Petrochemicals has also said in its restructuring proposal that an unsecured loan of Rs 107 crore from HSBC arranged by one of the promoters the Chatterjee group will be converted into equity at par.

Under the terms of the restructuring proposal submitted by HPL to the lenders, the Gas Authority of India Ltd (GAIL) and one of the promoters "" the Chatterjee group "" have committed Rs 468 crore as equity to the project.

Further, the company would arrange unsecured naphtha credit facility of around Rs 232 crore to partly offset the outstanding naphtha credit of Rs 298 crore from Indian Oil Corporation (IOC).

The other salient features of the restructuring proposal submitted by Haldia Petrochemicals are waiver of Rs 426 crore worth of interest; conversion of Rs 310 debt into zero-coupon bonds redeemable from 2019; reduction on interest rates of Rs 1,776 crore loan from 13-19 per cent to 8 per cent and moratorium of loans amounting to Rs 1,308 crore for 3 years and nine months.

"We have studied the proposal of the company. The CDR meeting will discuss it and it a final decision on HPL restructuring will be taken before end December," said an institutional source.

In the case of foreign currency loans, Haldia Petrochemicals has sought a reduction in interest rates from the present London Inter-bank offered rate (Libor) plus 250-400 basis points to Libor plus 175 basis points.

It has also sought reschedulement of repayment of foreign currency loans so that repayment of these loans commence from April 2007. These loans have to be repaid in 11 years.

Apart from the Chatterjee group, the other promoters of Haldia Petrochemicals are the West Bengal government and the Tata group.

The Tata group wants to exiting the company while IOC is keen on picking up 51 per cent equity subject to securing management control.