The West Bengal government’s plan to sell its stake in the loss-making Haldia Petrochemicals Ltd (HPL) received a severe jolt as ratings agency ICRA downgraded the company’s debt, following a delay in repayment of HPL’s debt obligations. The agency revised the long-term rating outstanding on Rs 2,421 crore term loans and Rs 600 crore fund-based facilities of HPL from ‘B’ to ‘D’. The short-term rating of outstanding on the Rs 2,106 crore non-fund based facilities of HPL was cut from ‘A4’ to ‘D’.
This may hamper the state government’s plan to offload its 39.9% stake in HPL amid increasing contingent and commitment liabilities. The downgrading may also impact HPL’s search to raise an additional Rs 1,000 crore credit line for working capital. The state government has already appointed Deloitte India to execute the divestment plan and a valuation process is going on. As of March 2012, the firm’s accumulated loss was around Rs 1,800 crore.