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The West Bengal Government on Thursday concluded the process to sell its nearly 40 per cent stake in ailing Haldia Petrochemicals Ltd (HPL).
IndianOil, the sole bidder, has been declared eligible to buy the 67.5 crore shares held by the State Government, provided the private sector partner The Chatterjee Group (TCG) does not exercise its first right of refusal. Bidding for the State’s stake was held on Monday.
TCG, which owns nearly 41 per cent stake in the petrochem project, holds the first right of refusal on the Government’s holding. The company has disputed the State’s claim on 15.5 crore shares (out of the 67.5 crore shares held by West Bengal Government), over which a case is in the Supreme Court.
After a marathon meeting between the group of ministers, transaction advisor Deloitte and IndianOil officials, Commerce and Industry Minister Partha Chatterjee announced accepting the downstream oil major’s bid.
“IndianOil is the sole bidder for the State Government’s shares. They have quoted higher than the reserve price. The bid is accepted,” Chatterjee told newspersons today
Price undisclosed
He did not disclose either the reserve price or the accepted bid-value, citing a non-disclosure agreement.
Sources in IndianOil, however, clarified that considering the complex legal history of HPL it is decided that the bid value would not be disclosed till TCG receives a formal request to exercise its first right of refusal at the discovered price. A communication in this regard is expected to reach TCG on Friday.
High price?
Unconfirmed sources say that IOC agreed to pay nearly Rs 1,700 crore at Rs 24-25 a share for the Government’s stake. This, they say, matches the West Bengal Government’s expectation to mop up Rs 1,500 crore (at nearly Rs 22 a share), through the sale. While IOC was not available for comments, analysts having direct knowledge on HPL affairs feel, any such offer should be considered “substantially high”.
The naphtha-based petrochem project, which has been making losses for the last five years, has eroded its net worth and is now short of cash to buy feedstock. The prospective investor has to sort out legal complications regarding ownership issues.
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