The board of cash-strapped Haldia Petrochemicals Ltd. (HPL) will consider at its meeting next week the proposal submitted by Switzerland-based Kolmar for a conversion arrangement, as per The Hindu. HPL had invited proposals from ` international business houses having a group turnover of US$500 mln 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 HPL, has also assured the lender and the rating agencies that a strategic partner or an investor will be inducted within six months. HPL currently produces at close to its capacity of 250 kilo tons 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. Keen to increase the proportion of the domestic sourcing, Haldia has begun talks with public sector oil refiners such as IOC (Kochi), MRPL (Chennai), and BPCL (Chennai). An agreement had been signed with HPCL, Vizag, for supplying naphtha.