The three promoters of Haldia Petrochemical Ltd (HPL) are expected to engage into further discussion on Friday with the financial institutions (FIs) in Mumbai to iron out differences in the proposed restructuring package of the troubled mega project.
The HPL parties had only on Wednesday met the consortium of institutions at the state headquarters Writers' Buildings.
The FIs have in principle agreed to work out a package for the Rs 5,600 crore HPL which is labouring under high debt.
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The package may include rollover of existing loans, reduction in interest rates, part conversion of high-cost loans into preference share or fully convertible debentures.
The package would also consider the proposal made by Indian Oil Corporation in which it demanded minimum reduction of authorised share capital of HPL from Rs 1,980 crore to Rs 1480 crore, a cut of nearly Rs 500 crore.
Although the consortium of FIs, led by IDBI, was eager to restructure the Rs 4,200 crore debt, partly because of their high exposure which may go down the drain if they do not take a proactive role, the FIs are also expected may take a tough stance on certain issues regarding promoters' involvement into other projects.
Institutional sources said the promoters have to commit all cash flow streams to a designated repayment account. They would also have to commit revenue streams from group operations for revival of the ailing unit and not take up new projects till the ailing one was turned around.
"Without this, institutions would not allow renegotiation of borrowings," they said. While such terms may not affect the West Bengal government, which in any case is keen to save HPL at any cost, it could hit the other two promoters, the Tatas and the Chatterjee Group (TCG). Both groups are diversified and needs for fresh investment in group companies are more pressing. This may actually force the Tatas to exit from HPL quicker than actually expected. Sources, however, said that such terms were not unexpected and though they were not discussed so far, it was implied.
"Such terms would come up when the final draft of the restructuring package would be discussed. But they are not insurmountable and negotiation can be made to curve out a better deal," sources close to the development said.