Lenders draw away from extending creditline to Haldia Petrochem

18-Sep-12

Haldia Petrochemicals is struggling to find a way out of its woes, as its lenders seems to be shying away from extending creditline to the dispute-hit firm, as per Business Standard. HPL was looking to raise an additional Rs 1,000 crore credit line for working capital. The major lenders of the company include IDBI Bank, ICICI Bank, IFCI, PNB, SBI, Allahabad Bank and Union Bank of India. Early this year, the firm’s board had cleared a proposal in order to save itself from reporting to the Board for Industrial and Financial Reconstruction (BIFR) as a potentially sick company by converting Rs 128 crore debt into equity at par basis, through which lenders got an 8% stake in the firm. However, the according to the company management, the facility is operating at more than 90% of its capacity. According to an official close to the development, except IDBI Bank, none of the lenders are willing to aid HPL. “Because of the dispute between major shareholders, lenders are not willing to support the firm,” the official said. The Chatterjee Group (TCG) chief Purnendu Chatterjee, had asked the state government to approach the lenders together, in order to raise the working capital, it is yet to receive a response from the state. When asked about the reaction from the banks, the state industries and commerce minister Partha Chatterjee, who is also the chairman of HPL, said, “Too much publicity on the issue is not helping the cause, it is frustrating the lenders. We are discussing among us on the next step regarding this and will come to a conclusion soon.” As of March, HPL had an accumulated loss of more than Rs 1,000 crore against a peak networth of Rs 2,844 crore, while the firm’s total debt was around Rs 3,700 crore.