Haldia Petrochem to borrow US$50 mln to finance ongoing expansion

In a move to finance its ongoing expansion plans, Haldia Petrochemicals (HPL) plans to raise US$50 mln ( Rs 200 crore) through the external commercial borrowing (ECB) route. This will form part of the Rs 400 crore being raised via debt for the project. The project has been dubbed as Project Supermax, and will result in a capacity increase of 30% plant from 520,000 tons to 670,000 tons by October 2008. The project cost has escalated to Rs 840 crore from the estimated Rs 770 crore because of delays. The ECB plan and a domestic rupee loan will each raise Rs 200 crore, with the balance being funded by internal generation. During the first eight months of 2007-08, Haldia has reported a marginal increase in gross sales, from Rs 5300 crore last year to Rs 5500 crore this year. Profit before tax has slumped from Rs 450 crore in the period of April-November 2006-07 to Rs 325 crore this fiscal. Two factors were primarily responsible for this slump in profits: A surge in naphtha prices in line with rising crude oil prices and strengthening of the Indian rupee.
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