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The latest issue holding up the plant is the lender-TCG wrangle. Lenders have refused to infuse fresh funds, seem to be on a warpath with the management.
"The primary duty of running a plant is that of the management's, he is required to bring in some cash which he has failed to do. If the management brings 20% of the cash, we are ready to pay the rest of the money" said the lender. According to him, the management has asked for about Rs 1,000 crore to buy naphtha, the main feedstock of the plant," a lender said.
He also said that though the share-purchase agreement had been signed between the promoters, the control had not been transferred to TCG due to Chatterjee's inability to pay the first installment. "Despite some serious concerns over the long-term viability of the plant, we are ready to extend loan if the promoter shows minimum interest," he said.
When contacted, a TCG official said that the lenders had many issues to sort out.
"The plant is knocking the doors of BIFR, they should do a proper valuation of the assets before blaming us," he said.
When asked about the payment of initial installment of share purchase to WBIDC, he said that though the process of raising the money had started, they were not ready to pay until the conditions were fulfilled. "There are some serious concerns which we have raised with the government which needs to be solved," he added.
TCG wants waiver of Rs 1,200 crore customs duty which is staring at HPL, as it failed to achieve the polymer export target as the plant was functioning below its capacity. "Then MD Sumantra Chowdhury claimed incentives depending upon absurd export targets, why will the new management bear this?" asked a close associate of Purnendu Chatterjee.
Krishna Gupta, managing director, WBIDC refused to comment on the developments. Last month, West Bengal Industrial Development Corporation (WBIDC) decided to sell its stake to the Purnendu Chatterjee-led group ending a decade-long dispute between the promoters and raising the hopes of the lenders.
Though the state government did not make any official announcement, it was reported that TCG had agreed to buy 520 million shares (30.8%) of WBIDC at Rs 25.10 a piece, matching the price offered by IOC after the government invited Expression of Interest (EoI) last year. However, it now seems that another dispute has cropped up.
Meanwhile, shutdown of HPL has forced the downstream plastic units to import polymers.
"One month ago Purnendu Chatterjee told us that the plant will reopen soon, but now it seems uncertain, so we are exporting polymer from Thailand, Malaysia and Singapore for our units," said Ramesh Kr.Rateria, vice president Indian Plastics Federation. The plant was shut down on July 6 due to shortage of working capital.
