Haldia Petro board to seek BIFR support

Haldia Petrochemicals Ltd, with its eroding net worth, might turn into a sick entity even before Indian Oil Corp takes over as its new owner.

At its extraordinary general meeting on yesterday, the board of the troubled petrochemical company, decided to refer itself to the Board for Industrial and Financial Reconstruction (BIFR) about the erosion of over 50 per cent of its net worth.

It also discussed the possibility of the company turning sick, according to HPL chairman and West Bengal industry minister Partha Chatterjee.

In response to a question as to whether the ownership would become difficult if the net worth was fully eroded and the company turned sick, Chatterjee said, the management was aware of it and would deal with it.

While West Bengal government a month ago decided to sell the 39.99-per cent stake it owned in HPL to IOC, the share transfer was yet to happen as the sale could go through only if Purnendu Chatterjee, who co-promoted and owned 41-per cent stake in HPL failed to match the price bid by IOC as he had the right of first refusal.

In the mean time Chatterjee has set up another hurdle with a status quo order he obtained on the transfer of 155 million shares - part of the stake being offloaded to IOC - delaying the transfer scheduled for today.

Further, the Purnendu Chatterjee-led The Chatterjee Group (TCG) has reiterated it would infuse funds in the company to save it from going to the Board for Industrial and Financial Reconstruction (BIFR).

Earlier, when HPL's stake sale was being planned by the West Bengal government, TCG had proposed infusion of Rs500 crore into the company on the condition of getting management control.

The West Bengal government however chose to go ahead with the stake sale and accepted Indian Oil Corporation as final bidder to hand over its 40 per cent stake (See: W Bengal govt accepts IOC's bid for Haldia Petrochem stake).

TCG was also supposed to exercise its right of first refusal (ROFR) on 10 November; however, the course of action was changed by court orders.

According to the terms of ROFR, the government could have sold the shares to IOC if TCG failed to inform the state about its decision by then, buy the exercise got delayed due to legal reasons.