Eastern India’s largest petrochemical company Haldia Petrochemicals is struggling to find a way out of its woes, as its lenders seems to be shying away from extending creditline to the dispute-hit firm.
According to an official close to the development, except IDBI Bank, none of the lenders are willing to aid HPL. “Because of the dispute between major shareholders, lenders are not willing to support the firm,” the official said.
HPL was looking to raise an additional Rs 1,000 crore credit line for working capital. Though The Chatterjee Group(TCG) chief Purnendu Chatterjee, one of the promoters of the company, had asked the state government to approach the lenders together, in order to raise the working capital, it is yet to receive a response from the state.
When asked about the reaction from the banks, the state industries and commerce minister Partha Chatterjee, who is also the chairman of HPL, said, “Too much publicity on the issue is not helping the cause, it is frustrating the lenders. We are discussing among us on the next step regarding this and will come to a conclusion soon.”
The major lenders of the company include IDBI Bank, ICICI Bank, IFCI, PNB, SBI, Allahabad Bank and Union Bank of India. Early this year, the firm’s board had cleared a proposal in order to save itself from reporting to the Board for Industrial and Financial Reconstruction (BIFR) as a potentially sick company by converting Rs 128 crore debt into equity at par basis, through which lenders got an 8% stake in the firm.
However, according to the company management, the facility is operating at more than 90% of its capacity giving hopes for a regain of the lost glory. “As far as HPL is concerned, our main focus is to get out of economic bankruptcy first,” the state industries minister said.
As of March, HPL had an accumulated loss of more than Rs 1,000 crore against a peak networth of Rs 2,844 crore, while the firm’s total debt was around Rs 3,700 crore.
Last year, the Supreme Court had dismissed a petition by TCG that challenged a High Court verdict that set aside a CLB directive asking the state government to exit the project by selling its stake to TCG. After that the state government had made it clear that it was looking to offload its stake in the company, possibly through auction route though the first right of refusal would be given to TCG.
Major players like MRPL, IOC, Reliance Industries and GAIL were keen on HPL stake. While TCG holds 40.88% stake, state holds 30.81% through WBIDC, while 9.18% is disputed shares.