Bengal government terminates stake sale process in Haldia Petrochemicals

20-Jun-14

The Bengal government has terminated the stake sale process in Haldia Petrochemicals (HPL), cited legal issues for cancelling the bid. Sources say IOC is unlikely to legally confront the government’s decision even though they expressed disappointment over the development. However as per a source, Indian Oil had pulled out of the race via a written letter before the elections, saying the company was no longer interested. Since there was no other bidder, scrapping the divestment process was just a mere formality. In its letter written in March to the West Bengal Industrial Development Corporation, IOC raised concerns over the inordinate delay in concluding the deal. IOC’s bid to buy shares at Rs 25.10 per share was opened on October 10, 2013. The PSU in the letter had indicated that the price quoted in the tender “may not be valid” because of the heavy losses suffered by HPL in the interim period. This could indicate that TCG is set to takeover Haldia Petrochemicals Ltd, and its chief Purnendu Chatterjee is likely to become the chairman. According to sources, TCG has also presented a number of conditions to the Bengal government for taking over HPL and the details are being worked out. IOC continues to hold an 8.89% stake in the company.