There was no decision today on the restructuring of Haldia Petrochemicals Ltd, involving both debt and promoters' equity. The company today announced it would take some months more before coming to a solution. Meanwhile, the promoters and lenders continued to debate on the future of the Rs 5,600 crore project.
"It will at least take 60 to 90 days before the issues pertaining to debt and equity restructuring of HPL are resolved," Purnendu Chatterjee, chairman of the The Chatterjee Group (TCG), one of the principal promoters of HPL, said after the company's fifteenth annual general meeting (AGM) and four-hour long board meeting.
Chatterjee said a decision on participation of Indian Oil Corporation (IOC) in the project as fourth promoter would be taken in this period as well. He also pointed out the terms laid down by IOC were unacceptable to the promoters.
"IOC proposals are very difficult to accept. There will be further negotiations with IOC in this period as it is part of debt and equity restructuring," Chatterjee said. IOC has sought to take 26 per cent stake in the company with management control. It has also demanded write off of authorised share capital of the company by Rs 750 crore.
He also pointed out that lenders and three existing promoters, TCG, West Bengal government and Tata Sons, must speed up the restructuring process. Chatterjee did not conceal his disappointment over slow progress on this front. "I would have liked things to move faster. But others are engaged in many things other than HPL," Chatterjee noted.
He also emphasised the need to infuse more equity in the company. "The adverse debt equity ratio of 4:1 is going against this excellent project. We need to infuse more equity. The promoters are ready to do that as well," Chatterjee said.
The debt and equity restructuring would involve a choice or mix from a range of instruments like redeemable preferential debentures, optional debentures or secured notes. Chatterjee cautioned that HPL would have to avoid the mistake of an excessively bloated equity base.
"Originally HPL envisaged a debt equity ratio of 1.6:1. But that may not be a good idea given that equity servicing is more difficult than debt servicing. We have to reach a mutually acceptable formula where lenders feel comfortable about their exposure and promoters are happy as well about their investment," Chatterjee said.
TCG chairman's statement on equity is in line with what IOC wants. However, both parties have differences on by how much this should be decreased.
At today's AGM, Tapan Mitra resigned from his post of HPL chairman. In his absence, Ashoke Gupta, secretary of the department of planning and development. of the West Bengal government, chaired the board meeting. "We are looking for a right person to run the company in professional way," Chatterjee informed, adding that the tradition of non-executive chairman was likely to continue in future.
