Haldia Petrochemicals plans diversification, drops plans for IPO

Haldia Petrochemicals Ltd (HPL) has confirmed plans to diversify its polymer business by adding new products and capacity. Proposals for the diversification are expected to be placed before the Board for approval by the end of this year. Upon approval, the project is estimated to be completed by 2010. The company is yet to decide on the investment funds requirement. The investment this time would be lower than the first plant, as the land for the plant and the common infrastructure needed was already with the company. HPL plans to fund the expansion from internal accruals and debt. Currently, the company's debt-equity ratio is at a healthy 1:1. The ongoing legal tussle between the two promoters - the West Bengal government and The Chatterjee Group (TCG), is expected to have minimum effect on the big investment plans of the company. HPL is expected to convene a meeting of its board later this month on October 29 to consider issue of shares to a consortium of 25 financial institutions led by IDBI and would have to issue shares worth Rs 127 crore to them following conversion of loans and equity.
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