Mangalore Refinery and Petrochemicals Ltd (MRPL)-a subsidiary of Oil and Natural Gas Corp (ONGC)-and Indian Oil Corp (IOC) have shown Expression of Interest (EOI) in acquiring the shares of West Bengal's showpiece industry Haldia Petrochemicals Ltd (HPL). Sources said that Reliance Industries Ltd (RIL) is also eyeing the entity.
"So far MRPL and IOC have shown Expression of Interest in buying HPL shares," state industry minister Partha Chatterjee told Mail Today. Chatterjee, who is also the chairman of HPL, said that both the firms have asked for the state government's permission to conduct a due diligence as they are keen to invest in the state government and The Chatterjee Group (TCG)-owned joint venture petrochemicals firm. It was further confirmed by top TCG officials, who said that MRPL and IOC have shown interest.
Reforms in Bengal slow, investors unhappy
Asked specifically about interest shown by Mukesh Ambani-owned RIL, Chatterjee said, "We have got no offer from RIL." He said that the company management is now looking at operational turnaround of the ailing unit rather than focussing on acquisition of shares by other firms. "We are primarily looking at the operation turnaround of the unit."
HPL has already appealed to IOC to resume the `300-crore naphtha credit and also sought extra working capital of `1,000 crore from lenders. The management is expected to submit its plan by June 30, sources said. Sources close to co-promoters of HPL said that the unit is in dire straits owing to the disagreement between TCG and the state government.
"Due to the litigation between the two promoters of HPL, the company is in a terrible mess. It is going to reach a state from where it will never recover. The government is tightening its grip violating the joint venture agreement with the private promoter," an official said.
"First they should focus on improving the operational growth of the unit, global networking, developing marketing skills and to get the best people for the job. Though it is already too late but still there is a chance. HPL must catch the bus now," the official added. Sources in TCG said the government has not done HPL valuation.
"We have been asking for valuation of the unit for the last two years. If they want to sell it to any third party, they should fix its value first," an official said. Former state industry minister Nirupam Sen pointed out that according to the HPL contract, TCG, one of the firm's co-promoters, has the first right to refusal. "As per the agreement, if the state government wants to sell the unit to any private player, they'll have to first offer it to TCG. The state government cannot hand it over to any third party," Sen told Mail Today.
The state government should make huge investments to make HPL profitable, Sen said adding that the former government had tried to set up a petrochemicals hub (Petroleum, Chemicals and Petrochemicals Investment Region) at Haldia to support HPL.
Courtesy: Mail Today