IOC extends HPL offer till December 31

New Delhi, Dec 10: Indianoil Corporation has extended its offer to become the fourth equity partner in $1.1 billion Haldia Petrochemicals Ltd (HPL) till December 31 while offering the beleaguered company naphtha on cash-and-carry basis.

“We have extended our offer of 26 per cent equity participation in HPL till December 31,” sources said. IOC’s earlier offer expired on November 30.

Sources however said IOC had not made any changes in its earlier position of management control with nothing less than 26 per cent stake and HPL sourcing its entire naphtha requirement from it.

IOC, India’s Fortune 500 company, that had stopped supply of naphtha to HPL following non-payment of dues, offered the West Bengal-based company naphtha supplies on cash-and-carry basis.

IOC had last month halted naphtha supplies to HPL as two of the company’s cheques amounting to Rs 17.33 crore and Rs 21 crore bounced consecutively, sources said.

HPL, which requires 150,000 tonnes naphtha per month, meets a major portion of its requirement through IOC.

Sources said IDBI-led financial institutions have agreed to IOC’s proposal for equity participation in HPL and were now awaiting additional equity infusion by the Chatterjee Group. The Chatterjee Group has already invested Rs 57 crore with the remaining Rs 107 crore to be infused in HPL by December 14, they said. Under the terms of the existing offer, IOC would acquire a 26 per cent stake in HPL at Rs 10 per share.

HPL, which began full commercial production of all its lymer units a month ago, while its naphtha cracker with an annual capacity of 420,000 tonnes began production last year, is faced with an equity shortfall of Rs 969 crore.

An adverse debt-equity ratio of about 4:1 has made the project commercially unviable, IOC sources said. (PTI)