RIL, IOC, GAIL-OIL lead race for Haldia Petrochem stake

Reliance Industries Ltd (RIL), IndianOil Corp (IOC) and a combine of gas distributor GAIL India and explorer Oil India Ltd are likely to bid for buying the West Bengal government's 31-per cent stake in the beleaguered Haldia Petrochemicals Ltd (HPL) when the sale takes place on 7 October.

The West Bengal government has invited price bids for the sale of its stake on that date, according to a PTI report citing three sources with direct knowledge of the development. ''In all probability, the price bid will be opened on the same day itself,'' one of the sources said.

RIL is considered the frontrunner for buying the stake. It may however face formidable competition from the state-owned combine of GAIL and OIL. Others who had submitted expressions of interest for buying the stake in HPL are Anil Agarwal-owned Vedanta Resources through its subsidiary Cairn India, state-owned Oil and Natural Gas Corp (ONGC) and Naveen Jindal's Jindal Steel and Power Ltd.

ONGC is said to be reconsidering its bid, while Cairn and Jindal have only an outside chance because of their lack of prior experience in owning or operating a cracker plant. RIL, GAIL and IOC are the only firms who have track-record of running big petrochemical plants.

Purnendu Chatterjee's The Chatterjee Group (TCG), a joint promoter of HPL, will have the right of first refusal to match the highest bidder. TCG, which holds a 40.88 per cent stake in HPL, will have 30 days to decide on matching the price quoted by the highest bidder and another month to make the payments.

The West Bengal government had in May sought buyers for its 39.99 per cent stake, or 67.5 crore equity shares, in HPL. The stake put on the block includes 15.5 crore shares to which TCG laid claim and approached the court.

The Calcutta High Court advised the state government to go ahead with the sale of the remaining stake, which is about 31 per cent.

TCG holds 69 crore shares, or 40.88 per cent, in HPL. IOC has an 8.89 per cent stake as a strategic investor and the rest is with financial institutions and Tata Group companies Tata Motors and Tata Power. Deloitte Touche Tohmatsu India is the transaction advisor to the West Bengal government and will manage the divestment.