HPL management’s meet with lenders remains unfruitful

July 4th, 2012 - 1:31 am ICT by IANS  

State Bank of India Kolkata, July 3 (IANS) The Haldia Petrochemicals Ltd (HPL) management’s meeting with lenders for getting Rs.10 billion worth of working capital for the cash-strapped firm did not work out Tuesday.

The State Bank of India (SBI) representative, leading the consortium of lenders, stated that banks had their own constraints and limitations to fund the company, the second largest maker of polyethylene in India and co-promoted by the West Bengal government and The Chatterjee Group(TCG), in the current situation.

HPL, also the largest petrochemical firm in eastern India, currently has an accumulated loss of more than Rs.1,200 billion against a peak net worth of Rs.28.44 billion, while the total debt is around Rs.37 billion.

The last board meeting of the company, whose ownership issue is yet to be resolved, in June saw a fiercely-fought boardroom and court battle, where Partha Bhattacharyya resigned from the post of managing director.

Bhattacharyya, the former Coal India chairman, had joined the company 13 months back.

His resignation, however, did not go down well with the lenders as the revival plan of the company, which called for a Rs.10 billion working capital, was actually worked out by him.

Company sources said without him, the lenders were not feeling confident that the plan could be properly implemented.

The SBI representative, who refused to divulge his name, said: “The lenders have their own problems and limitations.”

State Industry Minister Partha Chatterjee, who is also the chairman of HPL, however, said: “I hope they have understood our argument. We are hopeful of the fresh working capital loan from the lenders.”

Chatterjee pointed out that the plans of getting investors like Mangalore Refinery and Petrochemicals (MRPL), a subsidiary of Oil and Natural Gas Corporation (ONGC), and Indian Oil Corporation (IOC) to pick up stakes in HPL, have been shelved.

“My primary concern is revival of the company and only after it is achieved, the plans of getting IOC or MRPL will be considered,” he added.

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