Haldia Petrochemicals Ltd (HPL) will get a Rs 65 crore bridge loan from the West Bengal State Co-operative Bank (WBSCB) to part finance its short-term capital requirement.
The decision to this effect was taken at today's board meeting of the company, which was marked by absence of chairman Tarun Das, and Purnendu Chatterjee, one of the principal shareholders of the company.
According to the arrangement with the bank, the company board will issue Rs 65 crore worth of non-convertible debentures (NCDs) to WBSCB, the tenure and coupon rate of which would be decided later.
Sources said this would going to be a soft loan and coupon rate was likely to be lower than the annual average rate of interest of 14.5 per cent that HPL was paying at present.
HPL in the past had entered into such arrangements with several banks. The company had secured short-term finance in the nature of refinancing facility from banks such as SBI Frankfurt, KBC Antwerp and BNL Italy, for equivalent of Rs 70 crore for 90 to 180 days.
The HPL management was in a way forced to seek funds from WBSCB to tide over the financial mess the company was in following disagreement among promoters on issues of debt and equity restructuring. Outside the three promoters, the question of induction of Indian Oil Corporation (IOC) as fourth equity partner has also caused differences. The Chatterjee Group (TCG) was yet to pay Rs 107 crore as advance against equity to the company.
In a bid to keep itself afloat, HPL has curtailed payments to technology contractor and debtor amounting to Rs 900 crore. Companies such as Shell, ABB Lummus, Mitsubishi, Toyo, Daelim, Bechtel, Lurgi, Mitsui and Larsen Toubro were affected in this situation.
Operationally, HPL has stabilised after minor hiccups couple of weeks back when technical snag forced break in production for a few days. Naphtha supplies from IOC has resumed as well.
In nationwide polymer sales, HPL continued to be number two after Reliance Petrochemical (RPL). In November, HPL cornered a market share of 23 per cent.
