KOLKATA: HPL officials here said chairman Tarun Das and stakeholder Purnendu Chatterjee had begun talks with the Abu Dhabi firm to explore the latter's entry into the Haldia firm as a co-promoter. HPL officials are also in talks with Mitsubishi Oil, Indian Oil Corporation and the Oil and Natural Gas Corporation for the purpose. Promoters of HPL, which is neck-deep in debts, will have to raise -- in accordance with a debt-restructuring scheme -- 5 billion by November 30 and another 2 billion by February 28. "The Abu Dhabi oil company and Mitsubishi Oil are both looking at the possibility of getting involved with the HPL," a senior HPL official told IANS. HPL authorities want either of the foreign firms to pump in 2 billion that is required to be brought in by February 28. Talks with the Gas Authority of India Limited (GAIL) for the other required 5 billion are in an advanced stage. GAIL's participation in HPL has to be decided by November 30, the deadline given by HPL's lending agencies. Since beginning production in 2000, the joint venture HPL has been West Bengal's industrial showpiece. But the project, mired in alleged mismanagement and financial distress, has become more of a bother for the state government. The government, which holds 43 percent stake in HPL, has hinted at reducing its share. HPL began with a paid-up capital of 10.1 billion and an authorised share capital of 20 billion. The shortfall has been met with a loan of 5 billion from the Industrial Development Bank of India (IDBI) and 2.75 billion optionally convertible debentures and advance against equity from the Tatas and the state government. But the ever-increasing debt burden (at 17 percent rate of interest) is plunging HPL into a financial morass. HPL's saleability has been clouded by the fact that the project has attracted little downstream investment, a must for the survival of such a huge venture. For HPL to be financially viable, 40 percent of its produce has to be absorbed by downstream industries. So far it has got just over 50 small-to-medium downstream units, which falls quite short of the required number of such plants to absorb 40 percent of HPL's produce. HPL has a capacity to produce 650,000 tonnes of polymer annually. HPL earned 2.2 billion last month and is expected to garner 2.5 billion this month, company officials said.
Source: IANS