Cash-starved West Bengal plans to raise approximately Rs 450 crore by offloading its balance 10% stake of 155 mln shares in Haldia Petrochemicals (HPL) back to the company, as per Financial Express. This will leave majority shareholder Purnendu Chatterjee-led TCG with two options of either significant cash outgo to buy the 10% stake or letting the stake be snapped up by competitors. The sale will also violate a Supreme Court order, which had asked the state government to retain its residual stake.
The developments come in the backdrop of Rs 1,000 crore accumulated losses at HPL, which has charted a turnaround road map for the next three years. The company wants the government to hold on to its stake a bit longer as it will earn far more, once it is out of the red. West Bengal is also expediting transfer of an earlier block of 520 million shares (at Rs 28.80 each) as per the orders of the Company Law Board in 2007. The transfer of shares is in installments with the entire transaction divided into four tranches. The Left Front government had completed three tranches but had halted the fourth. However, the industry department has now cleared the last installment too from which the state would earn Rs 115 crore. Besides the state government with its 10% stake, the Tatas hold 2.88% in HPL, while IOC holds 9.61%. After the West Bengal government transfers 520 million shares, TCG’s stake will touch 77.56%.