IndianOil not to go for strategic pie in HPL
Ranchi   30-Apr-2012

Oil Co Can Buy More Stake If It Leads To Mgmt Control Reiterating its stand on making no further invest¬ment in ailing Haldia Petro¬chemicals (HPL) as a 'strate¬gic' investor, sources in the Maharatna oil PSU IndianOil told TOI that it can infuse fund as equity only if that leads to taking manage¬ment control of the petro-chemical major.

It may be noted that TOI had first reported in February that IndianOil was not keen to re¬main in HPL as strategic or portfolio investor.

“We have no problem with the state government or any other partner but IndianOil should have management control if we are to infuse fund. There is no point to infuse fund for say 26% or20% stake if we have no say in day-to-day operations. HPL is like a forward integra¬tion for us," sources added. In¬cidentally IndianOil had evinced in¬terest on taking management control of HPL earlier in 2005.

When contacted, the state commerce and industries minister, Partha Chatterjee, said the state government is open to a discussion with the oil major. "There is no formal discussion with IndianOil as of now," he added.

IndianOil had written a letter to the state chief secretary seek¬ing an appointment with chief minister Mamata Banerjee in January for its chairman R S Butola. IndianOil holds 8.9% stake in HPL through an investment of Rs 150 crore. The stake was 9.62% before conversion of Rs 128 crore debt into equity by some financial institutions (FI). The total debt of HPL stands around Rs 3,700crore. It has Rs 2,000 crore term loan and Rs 1,700 crore working capital It may be noted that Rs 128 crore of debt were con¬verted into equity at par basis (Rs 10) on March 27 Main lenders of HPL, IFCI, IDBI Bank, ICICI Bank, PNB, SBI, Allahabad Bank and Union Bank of India. Af¬ter the conversion, FIs hold 7.58% in HPL, TCG has 41 % and the state government 40% stake.

According to financial ex¬perts, HPL badly needs fresh equity infusion following huge losses in three consecutive years amounting to Ps 1,900 crore. There is also a strong argument in favour of IndianOil for taking over HPL be¬cause it supplies 20% of the naptha requirement; the main feed stock of the petrochem major.

"The annual requirement of naptha is almost two mil¬lion tonne which costs Rs 8,000 crore, almost 80% of the turn¬over of the company If we get a source where logistics is cheaper then it is really good for HPL," sources in the com¬pany added. IndianOil has refineries in Panipath and Barauni as well along with Haldia.