Haldia Petrochemicals is working out an action plan to avoid falling into the BIFR (Board for Industrial and Financial Reconstruction) fold, as per the Hindu. Since a 50% erosion in peak net worth will push the company into BIFR, HPL is striving hard to check the loss-making trend. HPL had a peak net worth of Rs.2,844 crore in 2007-08 which got eroded to Rs.2,097 crore on March 31, 2010, and could dip to Rs.1,422 crore, reflecting a 50 per cent erosion in the peak net worth. The company closed its first-half of 2011-12 with a net loss of Rs.418 crore, which is estimated to have mounted to around Rs.600 crore. If the company ends 2001-12 with a loss of Rs.675 crore, it will not be able to stave off the BIFR reporting.
The spectre of a mandatory reporting comes amid speculation surrounding the issue of the sale of residual shares by the State Government, which holds the key to the settlement of the ownership dispute between the Chatterjee Group and the West Bengal Government. Lenders are now expressing concern about taking further exposure as HPL's debt service ratio is now below 1, indicating that margins are inadequate to service debts.