The West Bengal government is set to lose 2.5% holding in Haldia Petrochemicals (HPL) as IDBI, its lead banker, will transfer R60.86 crore worth of loan to equity.
Although the HPL board was supposed to take a call on this issue at its September 20 board meeting, state industry and IT minister and HPL chairman Partha Chatterjee cancelled the meeting at the last moment.
Sources close to the development said the issue will have to be taken up at the board meeting following the annual general meeting on Wednesday. HPL, in 2004 as part of its corporate debt restructuring, signed an agreement with IDBI, which entitled the bank to convert its loan to equity if the company failed to repay the loan by September 25.
The company has not paid a single paise back to IDBI. Now, IDBI will get 6.086 crore HPL shares with this transfer.
While this will take away 2.5% holding from the government, it will take away 1% of the promoter group?s ? The Chatterjee Group ? holding.
The government had a 44.5% holding in HPL, which increased to 54.5% after the 10% residual shares were transferred to it following a Supreme Court order.
The matter regarding residual shares is now pending at the international court. But the government had to offload around 3% shares in March when it converted R128 crore worth of loan to equity to various bankers.
Now if 2.5% of government stake is diluted further, the government’s stake will come down to 49%, which could spark off another controversy.
The company’s net loss grew 186% year on year to R951 crore in FY12, although net revenue grew 7.9% to R8,153 crore during the same period.
However, there was a 14% y-o-y increase in the value of raw material consumption to R7,001 crore, while depreciation and interest grew above 21% y-o-y to R811 crore in FY12. The company’s reserves are at a negative ? R474 crore, while long term borrowings as of March 31 2012 stand at R1,543 crore.