The West Bengal government on Thursday announced that it has considered Indian Oil Corporation?s (IOC?s) bid as the only valid one for picking up the government?s 31% stake in Haldia Petrochemicals, which till date has an accumulated loss of R3,200 crore and debt of R4,000 crore.
The government has offered its stake to get out of the loss making company as well as generate revenue for its cash strapped kitty. The sale, however, can get through only if Purnendu Chatterjee who co-promoted and owns 41% stake in HPL doesn?t match IOC?s price bid. Chatterjee has the first right of refusal.
Chatterjee is, however, trying to block the sale claiming that IOC?s takeover would not conform the articles of association, which mandates HPL to be a private sector managed company. Chatterjee-controlled The Chatterjee Group has also moved the International Court of Law and has sought reviewing the Supreme Court judgment, which has allowed the West Bengal government to have management control in HPL.
The Supreme Court has accepted the review petition and the Calcutta High Court has put a bar on any share transfer unless the Supreme Court gives a final verdict.
The state government, however, on Thursday made clear that it has not admitted Reliance Industries? bid, which was submitted after the cut off time on Monday during an auction process earlier called by the state government through consultant Deloitte.
??We have informed IOC that their bid was the only one to be found acceptable,? state industry minister Partha Chatterjee said after a meeting of a group of ministers held to clear the bid.
While the minister did not disclose the bid price citing confidentiality pact, he said it was much more than what Deloitte decided as reserve price.
The Chatterjee Group is likely to match IOC?s bid if it is very close to the reserve price, sources said. But if that doesn?t happen, IOC, which already owns 9% holding, would emerge as the majority owner.
However, IOC?s 9% holding in HPL is also a subjudice matter.
In fact, IOC?s takeover would ensure HPL?s raw material supply as naphtha is a byproduct of crude derived from IOC?s refinery at Haldia. The central government had earlier granted custom duty waiver to the extent of 5% on imported naphtha as a special case to tide over HPL?s financial crisis.
Despite such difficulties, HPL controls about 22% of country?s petrochemicals industry and its market share is a high 60% in the eastern region, where it is the only integrated producer.