Four-point formula to end Haldia row

A four-point compromise formula for the promoters' dispute in Haldia Petrochemicals suggested by the Company Law Board could see an additional equity infusion of Rs 395 crore in the company, provided all parties to the dispute accept the formula.

In addition, the formula would result in the TCG remaining the largest shareholder of Haldia, and a public issue within a set timeframe of four months. The public issue will, among other things, offer an opportunity to some of the parties to the dispute to exit.

Suggested by CLB chairman S Balasubramanian, the formula holds hopes for the parties to the dispute "" original promoters of Haldia, the Chatterjee Group (TCG), the West Bengal government. Other parties to the dispute include the lenders led by the IDBI and the Indian Oil Corporation (IOC).

The key elements of the formula are the cancellation of all agreements between the TCG group and the West Bengal government regarding share transfers. The government would be required to refund any part payment received from TCG towards transfer of shares.

TCG, on its part, would not contest the Rs 150 crore share allotment made to IOC and the Rs 135 crore allotment to financial institutions led by IDBI as a part of the corporate debt restructuring package.

Once the allotment to IDBI is over, TCG would be alloted roughly Rs 395 crore worth of equity shares at their par value. The allotment to IOC and IDBI would also be at par value.

Finally, Haldia would be required to make an intial public offering of shares within a timeframe of about four months.