RIL, IOCL gear up to bid for stake in Haldia Petrochemicals

09-May-13

WBIDC is putting its nearly 40% stake on the block, emboldened by a Calcutta High Court verdict last month that cleared the decks for the government to discover the best price for its shares. Reliance Industries Ltd and the Indian Oil Corporation (IOC), the country’s top two energy giants, are gearing up to bid for the Bengal government’s stake in Haldia Petrochemicals Ltd (HPL). As per industry sources in The Telegraph, both companies were keenly awaiting the publication of the expression of interest by Deloitte on behalf of the West Bengal Industrial Development Corporation (WBIDC), which holds the government shares in HPL. An expression of interest or EoI seeks responses from prospective bidders. IOC already has an 8.89% stake in HPL. “The company wanted to negotiate directly with the state and buy its share. However, the government has opted for auctions. Even then, the IOC is likely to bid since it already has a presence in the firm as well as at Haldia where the PSU has a refinery,” the source added. Other industry sources cautioned that although an auction was the best possible route in the post-2G and coal allocations scandal environment, the Bengal government should not expect unrealistic gains from the stake sale. HPL has suffered heavy losses in the past few years, eroding its value. However, the highest bidder can get the stake only if the existing private promoter, The Chatterjee Group, does not match the best price.