Haldia public float plan hit by revamp delay

The proposed initial public offer (IPO) of Haldia Petrochemicals Ltd (HPL) may be delayed till September as the company is yet to implement the first phase of the corporate debt restructuring (CDR) package based on fund infusion by GAIL India Ltd.

Earlier the company had planned to hit the market in June. However, given the circumstances that possibility is ruled out. HPL is yet to appoint merchant bankers for the IPO even though informal discussions had taken place with number of them.

"The first priority for the company is bringing GAIL's investment in HPL. However, the process is being delayed because the PSU major is yet to receive the Public Investment Board and Cabinet Committee of Economic Affairs approval," sources close to the development, said.

CDR cell in January asked HPL promoters, The Chatterjee Group (TCG), government of West Bengal and Tata Sons, to bring in Rs 600 crore fresh cash to revive the company. Part of the capital (Rs 268 crore) was supposed to be brought by IPO, fully underwritten by TCG, while the rest was to be put in by GAIL as a fourth promoter.

CDR cell offered six month time to float IPO, while GAIL was given three months to bring in the cash. However, GAIL could not honour the commitment as it was yet to get PIB approval, required for any investment over Rs 200 crore, for picking up HPL stake. The government's stamp on the deal will be possible only after a new ministry is formed.

Meanwhile, IDBI, the lead lender for the Rs 4,500 crore debt, has granted an extension which GAIL sought in April. HPL officials are hopeful that CDR will also extend the timeframe for IPO as well, given a robust operational performance last fiscal.

It recorded 45 per cent jump in sales, touching Rs 4,300 crore in 2003-04 compared with Rs 2,950 crore in the previous year. It may also post a profit after taxof Rs 50-60 crore, if the CDR package is taken into account.

The profit marks a significant turnaround in the annals of the company, which had piled up loss over Rs 1,000 crore since it went commercial in August 2001. The company is now finalising its account according to Indian GAAP and US GAAP to facilitate foreign funds investing in company's IPO.