Chatterjee keen to acquire Govt's share in HPL through leveraged buy-out

19-Jul-05

Purnendu Chatterjee seems eager to acquire the Bengal government's 36.87% stake in Haldia Petrochemicals (HPL) through the leveraged buy-out route. In a leveraged deal, over 70% of the money needed for a buyout is borrowed from banks and financial institutions, subject to lenders' stipulations and conditions. Currently Chatterjee has to shell out Rs 1,560 crore to buy out the government in HPL. He seems to be in talks with Deustche Bank and State Bank of India for the leveraged buy-out. If Chatterjee goes ahead with a leveraged buy-out, he will have to bring in Rs 468 crore, while Rs 1,092 crore will come from banks and FIs. The Bengal government's views on the issue are not known, even as it has decided not to wait for an indefinite period for Purnendu to buy out its shares in HPL. The state will rethink the acquisition issue if the July 31 deadline slips by, specially since Indian Oil Corporation is eagerly waiting to join HPL and acquire the government's stake. Earlier, in February this year, IOC had sent a Rs 150-crore cheque to HPL, which got accepted by the board, but has not yet been encashed. The cheque is valid till August 18. IOC has requested for a 7.5% stake in exchange for the Rs 150 crore it has already paid to HPL.