The board of the cash-strapped Haldia Petrochemicals Ltd. (HPL) will consider at its meeting next week the proposal submitted by the Switzerland-based Kolmar for a conversion arrangement, HPL managing director Sumantra Choudhury said.

HPL had invited proposals from ` international business houses having a group turnover of $ 500 million (in 2011) with experience in petrochemicals feedstock sourcing and marketing of finished products’.

“The company, if chosen, will buy their own naphtha, and will utilise a part of our idle capacity and export the output,” The Managing Director said. HPL would get a conversion charge for this through a one-time arrangement for a three-month period.

The state government, which is now controlling the joint venture HPL, has also assured the lender and the rating agencies that a strategic partner or an investor will be inducted within six months.

HPL is now producing at close to its capacity of 250 kilo tones per hour through a Rs. 200-crore letter of credit from its lenders. It needs around Rs. 600 crore to meet its full feedstock requirement.

It now imports most of its naphtha with Indian Oil Corporation Haldia supplying the balance.

“We are keen to increase the proportion of the domestic sourcing, and have begun talks with public sector oil refiners such as IOC (Kochi), MRPL (Chennai), and BPCL (Chennai),” he said. An agreement had been signed with HPCL, Vizag, for supplying naphtha.

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