The West Bengal government, as a majority shareholder in HPL, is not keen on HPL investing in Basell, which has been recently acquired by Chatterjee promoted consortium. Once Chatterjee (43% satke in Haldia Petrochem) buys out the government's 36% stake, he will be in a position to make HPL invest in Basell. Talks have been on between the two parties for acquisition of the gvernment's 36% stake by Chatterjee. However, these talks seemed to have reached a dead end last weekend.
The Bengal government could not reach a pact today on transferring its shares in Haldia Petrochemicals to Purnendu Chatterjee's The Chatterjee Group (TCG).
At the outset, Purnendu was not pleased about the pricing of HPL shares. He has questioned the logic of giving away shares at Rs 10 to Indian Oil at a time when he is being asked to pay Rs 30 - a premium of Rs 20. The other factor has been the insistence by the government's to fork out Rs 1,560 crore for acquiring its 36% stake in one single instalment, with a possible allowance of 2 months. Chatterjee would need Reserve Bank permission if he decides to get foreign cash.
Another point that the government raised was related to pledging of lenders' share in HPL to raise money that Purnendu needs to acquire Basell Polyolefins. Thestate government has asked Purnendu to get permission from lenders if their equity is to be pledged to raise loans needed to close the Basell deal.
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30-May-05 
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