West Bengal will conduct an auction for the sale of its stake in Haldia Petrochemicals, the Commerce and Industry Minister, Mr Partha Chatterjee, said today, adding that co-promoter The Chatterjee Group (TCG) will be allowed to match the highest offer before any transaction is finalised.
“We will first go for an open bidding for Haldia Petrochemicals Ltd (HPL) shares held by the Government. Then the highest bid price would be offered to TCG for exercising their first right of refusal,” Mr Chatterjee told PTI here.
“If TCG refuses to buy the shares at that price, then the shares will be offered to the highest bidder,” he said.
The Government, he said, would seek to get the maximum return on its investment in HPL. “This is why we will take the open bidding route,” he said.
Earlier, TCG chief, Mr Purnendu Chatterjee, had said the government should allow it to exercise the first right of refusal as per the agreement reached between the two promoters.
In the last board meeting of HPL, the two promoters had mutually agreed to sort out the issue through dialogue.
Mukesh Ambani-led Reliance Industries is believed to also be interested in the West Bengal Government’s stake in Haldia Petrochemicals.
The company’s earnings have taken a hit due to lower margins and high price of naphtha and the state government is keen to make an exit from the company at the earliest possible opportunity.
The government has already appointed SBI Capital Markets to carry out a valuation of HPL shares. A small internal team of the government had also been formed for the purpose.
The West Bengal Commerce Minister said following the recent Supreme Court judgment, the state government has the controlling stake of 52 per cent in HPL, including preferential shares.
The West Bengal government has been locked in a battle with TCG for control of HPL since 2006. Most recently, the Supreme Court dismissed a petition filed by The Chatterjee Group (TCG) against the decision of the Calcutta High Court allowing the West Bengal Government to retain 155 million shares in Haldia Petrochemicals Ltd.
Purnendu Chatterjee-led TCG had approached the Supreme Court after the High Court set aside an order of the Company Law Board (CLB) directing the state government to exit from HPL by selling its stake to its joint venture partner, TCG.