The Company Law Board (CLB) has suggested a four-point compromise formula to end the legal battle between The Chatterjee Group (TCG) and the West Bengal government over Haldia Petrochemicals (HPL).
The main suggestion is
* To make TCG the largest shareholder till HPL comes out with an initial public offering (IPO). All agreements between TCG and the government (represented by the West Bengal Industrial Development Corporation) relating to share transfers held by the latter to the former would be treated as cancelled.
* WBIDC to refund "whatever part payment" that TCG has made to it for transfer of shares.
* TCG shall not contest the Rs 150 crore share allotment to Indian Oil Corporation (IOC) and financial institutions led by IDBI under the terms of the corporate debt restructuring CDR) package worth Rs 135 crore. After the allotment of shares to IDBI, TCG will be allotted such number of equity shares (roughly Rs 395 crore), which could increase their shareholding to 51%. The allotment will be at par as in the case of IOC and IDBI.
* HPL to go for an IPO within a set time-frame of 3-4 months.
If this formula is accepted by TCG, IOC, WBIDC along with the financial institutions, then HPL will have an immediate cash flow of Rs 395 crore, which it can utilise to clear its outstanding debt and reduce its debt/equity ratio. WBIDC gets the option to divest its share either fully or in part through the IPO. IDBI gets its loan back, and would have an option to sell the allotted shares in the open market.
16-Mar-06 
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