TCG ready to buy out West Bengal's holding in HPL

Share price fixed at a little less than Rs 29, but equity issue to IOC may be dropped

The battle for the control Haldia Petrochemicals Ltd (HPL) between co-promoters The Chatterjee Group (TCG), the government of West Bengal (GoWB) and the prospective investor, Indian Oil Corporation (IOC), took a new turn with TCG reportedly indicating its willingness to pay GoWB just under Rs 29 for the government's shares in HPL, backed by funds from Deutsche Bank, if only the government got IOC out of HPL.

Neither TCG nor GoWB could be contacted for comments on the issue.

However, sources close the development told Business Standard late on Monday that TCG had lined up funds to pay a price of just under Rs 29 per HPL share but was adamant that the government-proposed deal to sell HPL shares to IOC at Rs 10 per share be killed.

Deutsche Bank had emerged as banker for TCG in the deal, according to sources.

"The government would have to get a release from IOC for the deal to go through", said sources.

Sources said the TCG was ready to pay GoWB within 21 to 30 days if IOC was excluded.

On Monday, July 18, IOC chairman S Behuria had met West Bengal chief minister Buddhadeb Bhattacharjee at the state government headquarters of Writers' Buildings in Kolkata and asked the government to conclude the issue of HPL shares to IOC at par by August 18, when the cheque issued by IOC for HPL shares at Rs 10 would lapse 90 days after issue.

According to vernacular news channels, IOC threatened to take legal action if the deal was not consummated.

IOC could not be contacted for confirmation.

The government was selling the family silver cheap by offering HPL shares at Rs 10 to IOC, sources close to TCG quoted that camp as saying. All such share transactions at HPL would also require clearance from its lenders, sources pointed out.