The Hindu Business Line : GAIL to bring in Rs 150 cr as Haldia's strategic partner

GAIL (India) Ltd is the proposed strategic partner of Haldia Petrochemicals Ltd (HPL) and not Indian Oil Corporation (IOC). GAIL has already been asked to chip in with Rs 150 crore as equity by August 31 this year, for a seven to eight per cent stake in HPL.

GAIL has accepted the offer. With this investment, GAIL believes that it will be able to get a toehold in the HPL board of directors and also be in a good position to involve itself in the development of gas-based downstream units of the petrochemical plant.

Replying to a questionnaire sent by Business Line, the GAIL Chairman and Managing Director, Mr Proshanto Banerjee, said that the West Bengal Government, one of the promoters of HPL, had already informed them about the development.

"GAIL is waiting for a formal communication from HPL. We are also awaiting an endorsement from the Committee of Corporate Debt Restructuring (CDR) on the revised equipment," the communication stated. GAIL will be holding 7-8 per cent stake in HPL against 15-per cent stake that it wanted.

Mr Nirupam Sen, West Bengal Minister for Commerce and Industry, confirmed the development.

"We have advised GAIL to bring in Rs 150 crore as equity for HPL," Mr Sen said.

According to him, IOC will not be taking up equity stake in HPL.

"At this juncture, there is no such possibility. In fact, there was no communication from IOC in the post-CDR period. So, they can be ruled out for the time being," Mr Sen said.

It may be noted that the CDR cell had asked the HPL promoters to infuse fresh capital of Rs 600 crore.

The Chatterjee Group (TCG) has already invested Rs 143 crore. GAIL was supposed to bring in Rs 332 crore by March 31, 2004, but it failed due to a delay in the PIB (Public Investment Board) clearance.

Even as HPL promoters were trying to get the debt-restructuring package through, HPL's financial performance improved drastically.

A senior board member of HPL said that the fate of the company no longer hinges on the equity participation of a `strategic partner'.

"We now have the liberty to raise enough capital from the stock market. In fact, the size of GAIL participation was finalised after considering the amount of equity that HPL can raise from its initial public offering, which is scheduled to come during this year," the board member said.

Going by this equation, the size of the proposed IPO of HPL is likely to Rs 307 crore. Sources said that the top management of HPL held several rounds of talks with a number of merchant bankers.

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