RIL, ONGC among six in race for Bengal govt's HPL stake

Despite mounting losses and a protracted legal fight at Haldia Petrochemicals Ltd, six major companies, including Reliance Industries Ltd and state-run Oil and Natural Gas Corporation Ltd, have expressed interest in buying the West Bengal government’s nearly 40 per cent stake in eastern India's biggest petrochemical company.

Cairn India Ltd, Essar Group, IndianOil Corp Ltd and GAIL India are the four other companies that filed formal expressions of interest on Monday to acquire the stake. Today was the final day for joining the bid.

HPL chairman and West Bengal industries minister Partha Chatterjee confirmed that the company got EoIs from six participants.

“We have received EoIs from Essar, Cairn India, RIL, IndianOil, ONGC and GAIL India.”

RIL's interest in HPL was widely known, but the Mukesh Ambani-led company was mum about its participation in the bid.

When contacted, a Cairn India spokesperson declined comment. Business Standard had on Saturday reported that Essar would join the race for the HPL stake.

Mangalore Refinery and Petrochemicals Ltd, a subsidiary of ONGC, was also keen to participate in the bid but stepped back later.

An ONGC official said on condition of anonymity, that it did not make any sense for MRPL to bid for HPL shares.

Business Standard had earlier reported on how MRPL backed off from its plan to buy out the West Bengal government’s stake in HPL.

The state government controls its 40 per cent stake in HPL through West Bengal Industrial Development Corporation.

GAIL India officials confirmed to Business Standard that the company had submitted its EoI.

“Being in the petrochemical business, we are certainly interested in HPL. We have filed our EoI today,” said a company official.

There was speculations that IndianOil and ONGC would have submitted their EoIs through a joint consortium but the state-run companies placed separate letters. IndianOil already has an 8.9 per cent stake in HPL.

According to a WBIDC official, a management team of IndianOil and ONGC had visited the HPL plant in Haldia recently as the former was more than keen to acquire the stake.

The Purnendu Chatterjee-led The Chatterjee Group, another key promoter in HPL, has the first right of refusal. TCG has been at loggerheads with the West Bengal government over management control in the company.

Besides, the firm reportedly made a loss of Rs 900 crore (Rs 9 billion) in 2012-13, while it was around Rs 850 crore (Rs 8.5 billion) the year before.

The company has often been at the receiving end of the shareholders’ dispute, and it was one of the reasons why HPL was not able to secure any fresh working capital loan from its lenders.

However, a meeting of lenders is slated to happen on June 14 and they are expected to release Rs 400 crore (Rs 4 billion) to the ailing company as WBIDC has given in-principle approval to extend a term loan of Rs 100 crore (Rs 1 billion). For the stake of it

• West Bengal government has around 40 per cent stake in HPL via WBIDC

• The Chatterjee Group will have the first right of refusal

• IOC already has 8.9 per cent stake in HPL

• WBIDC and TCG have been at loggerheads over management control in HPL

• Promoters' battle is one of the reasons why HPL was not able to secure any fresh working capital loan from its lenders

• A meeting of HPL lenders to be held on 14 June, Rs 400-crore (Rs 4-billion) loan might be extended

• MRPL was keen to participate in the bid, but backed off later