IOC eyes Government share in HPL

05-Sep-05

Indian Oil Corporation (IOC), with 7.5% stake in the present equity of Haldia Petrochemicals Ltd (HPL) seems keen to acquire the Bengal government's share in HPL, and not just end up as a portfolio investor. IOC seems to view this acquisition at Rs150 crore, not as a mere entry into the petrochemical sector, but seems keen to run the company and expand it. This statement coincides with Purnendu Chatterjee of The Chatterjee Group (TCG)'s legal battle with the Bengal government in the company law board (CLB) over allotment of shares to IOC. TCG claims that it had the pre-emptive right to any share allotment and should have been given the first right of refusal for the shares, an attempt to delay the stake sale to IOC Last month, the Bengal government offered to sell its 43% stake in HPL to TCG at Rs 28.80 per share, which did not go through, as Chatterjee could not arrange the funds. This led to the deal being called off by the Bengal Government after a month's wait. Since the Bengal Govt. has decided to exit from HPL in the long run, it is scouting for a buyer for HPL, which is located next to IOC's Haldia refinery. HPL seems to be a strategic fit to IOC, that has promised a significant investment at Haldia, plans to convert the port town into a petrochemical hub on the east coast.