The cash-strapped West Bengal government is looking to raise over Rs. 1700 crore from the divestment of its holding in Haldia Petrochemicals Ltd.

It is learnt that the Indian Oil Corporation has offered Rs. 25.10 per share for the 39.9 per cent equity holding put on the block by the government (including a disputed portion). HPL chairman and West Bengal Industry Minister Partha Chatterjee said that the price offered by IOC was much higher than the reserve price set by the transaction consultants.

The state government’s equity shares are held by West Bengal Industrial Development Corporation, while some preference shares (also being offered for sale) are held by the WBIDC, West Bengal Industrial Infrastructure Development Corporation and West Bengal Industrial Development Finance Corporation.

The state government accepted Indian Oil Corporation as the sole bidder on October 10, despatching on the same day letters to the PSU accepting its bid, and to The Chatterjee Group, the other major private sector equity holder, asking it to match the offer.

However, officials connected with the development said that the latter sent to TCG could become a bone-of-contention as it did not contain any other details of the offer. “Matching an offer with the first right of refusal is not only about matching the financial part of the offer… details have to be provided about when the money is expected to be pumped, and under what conditions... all of this need to be matched.”

If TCG accepts this letter, then it would have to respond by November 9, and bring the money in another 30 days.

The price offered by IOC is much higher than the reserve price set by the transaction consultants