RIL, IndianOil in race for state’s Haldia stake
New Delhi   11-Jun-2013

Two of India's largest refiners — Reliance Industries (RIL) and its PSU peer IndianOil — have submitted an expression of interest (EoI) to buy out the West Bengal government's 31% stake in the beleaguered Haldia Petrochemicals (HPL). The bidding deadline for the stake expires Monday evening.

Besides the two major refiners, state-owned oil major ONGC, gas major GAIL India and private firms like Anil Agarwal-led Vedanta Resources through its subsidiary Cairn India and Naveen Jindal's Jindal Steel & Power Ltd are also in the fray, said sources in the know. Purunendu Chatterjee-led The Chatterjee Group (TCG) — a joint promoter of HPL — will have a right of first refusal to match the highest bidder.

RIL executive director Nikhil Meswani, a cousin of RIL chairman Mukesh Ambani, is personally taking interest in the project and is learnt to have initiated discussions with the state government and TCG chairman Chatterjee. An RIL spokesperson, however, declined to comment on the issue.

The EoI for HPL evoked an unexpectedly good response from half-a-dozen PSUs and private firms despite a prolonged legal battle between the two promoters — the West Bengal government and TCG. "We have got a very good response for our stake in HPL. All the major PSU players in the field and RIL have filed EoIs for HPL. It shows the confidence of investors in Bengal," state commerce and industries minister Partha Chatterjee told TOI on Monday.

ONGC chairman Sudhir Vasudeva didn't answer calls while GAIL chairman B C Tripathi was busy in board meeting on Monday. However, ONGC, GAIL and IOC sources confirmed their interest in HPL. JSPL MD & CEO Ravi Uppal and deputy MD Sushil Maroo didn't return calls made by TOI. A Cairn India spokesperson also declined to comment.

The state government initially floated an EoI for 67.5 crore equity shares, which constitute 39.99% of paid-up equity of the company. Consultancy major Deloitte came out with an invitation for EoI on May 10. However, two TCG firms argued that out of 67.5 crore shares, 15.5 crore shares are disputed and their transfer may have legal ramifications. The Calcutta high court then advised the state government to go ahead with the remaining stake, which is around 31%.

HPL co-promoter TCG holds 69 crore equity shares, which is 41% of the paid-up equity of the company. Sources point out that it would be a tough fight between the PSU major and RIL to acquire the government stake in HPL.

Indian Oil, which has 8.89% equity stake in HPL, is a strategic investor and wants to be co-promoter of the firm as it operates a refinery in Haldia. RIL can turn around HPL with cost optimisation, said sources.