West Bengal Government’s plan to exit Haldia Petrochemical Ltd. (HPL) has run into rough weather with two companies belonging to The Chatterjee Group (TCG) issuing a public notice cautioning any person submitting an expression of interest.
The bone of contention is the 155 million shares on which TCG lays claim. The notice, given as an advertisement in a daily, said that any person submitting an expression of interest for the purchase of 675 million shares of HPL will do so subject to the existing rights of Chatterjee Petrochem (Maurtius) Company and Chatterjee Petrochem (India) Pvt. Ltd.
The TCG group holds its equity in the joint venture petrochemical company through these two companies, and is questioning the portion of state equity-holding.
However, a delay in the process does not augur well for HPL which is performing below par mainly due to funds crisis. The region’s lone petrochemical plant, and India’s second largest, which went commercial in August 2001, is operating at an average capacity of only 65 per cent (of 6.7 kilo tonnes of ethylene) .
The state government, seeking to exit HPL, had invited, through Deloitte Touche Tohmatsu India, expressions of interest for selling 39.99 per cent equity. Deloitte is the transaction advisor and the manager of the disinvestment process to the state’s apex industry promotion agency.
Highlighting the legal dispute over the 155 million shares, the TCG group said that in March 2012, CPMC had initiated arbitration proceedings in respect of the shares before the International Court of Arbitration of the International Chamber of Commerce, Paris.
Of the 1,688 million shares of HPL, if the disputed 155 million shares is set aside, then TCG would be the majority holder with about 45 per cent, followed by the state government with around 34 per cent, Indian Oil Corporation 9 per cent, financial institutions 8 per cent and the Tatas 2.5 per cent.
The deadline for EoI submission is June 10 with TCG having the first right of refusal.