Haldia Petrochemicals may resume work soon

The operations of the plant had been suspended since July 6 due to shortage of working capital

Bengal’s flagship industrial project Haldia Petrochemicals Ltd (HPL) is likely to resume operations after a gap of four months, with its lenders agreeing to infuse fresh funds following a recent board meeting.

The operations of the plant has been suspended since July 6 due to shortage of working capital.

“A consensus is being built by the lenders’ group to infuse funds after the plant was found to be in fine shape for restarting operations. We are still waiting for a fitness certificate from the audit team,” said a member of the lenders’ consortium.

The main lenders of HPL are IDBI, SBI, PNB, ICICI and IFCI. The bankers had earlier said that the lender group would not provide funds since the promoter was not showing any interest in the project.

In September, the state government represented by West Bengal Industrial Development Corporation (WBIDC) finally decided to offload its 520 million shares (30.8 per cent) in favour of Purnendu Chatterjee-led The Chatterjee Group (TCG) matching the price of Rs 25.10 a piece quoted by Indian Oil after the government invited an expression of interest (EoI) last year.

But the lenders were reluctant to infuse fresh funds because the control had not been transferred to TCG due to Chatterjee’s inability to pay the first installment though the share-purchase agreement had been signed between the promoters.

A senior TCG official said the process of allowing fund infusion is a long one, but the lenders “are trying to restructure the loans.” He declined to give any timeframe for the restart of operations. However, plant officials confirmed that an audit team had visited the plant recently.

“The audit team visited the plant on Tuesday and gave a fitness certificate. So we are expecting work to restart soon,” the official said. According to sources, the plant is going to restart functions from the third week of November. It needs around Rs 1,000 crore to buy naptha, the main feedstock of the plant.

Even after wresting the management control of the plant, TCG demanded a waiver of Rs 1,200 crore customs duty, which was levied on the plant, as it failed to achieve the polymer export target due to below-capacity production.

“We have informed the state government about our concerns, the ball is in their court,“ the TCG official said.

Krishna Gupta, managing director, WBIDC, refused to comment on the developments.