In yet another controversial decision, the Haldia Petrochemicals Ltd (HPL) board on Tuesday decided to go for a rights issue at Rs 25.10 per share to save the ailing petrochemicals unit. The issue ratio and other details are not yet decided.
“The Board has decided to opt for a rights issue,” Partha Chatterjee, Chairman, HPL and West Bengal Commerce and Industry Minister, told newspersons after the board meet here on Tuesday.
Asked if the decision was taken unanimously with the co-promoter, The Chatterjee Group (TCG), he said: “I can talk only about board decisions.”
Sources, however, confirm that the decision was taken ignoring objections from TCG.
The pricing is determined based on the recent bid by the West Bengal Government to auction its 40 per cent stake. The offer included an approximately 9.2 per cent holding that is disputed by TCG.
The auction, held in October this year, attracted a single bid from IndianOil Corp (IOC) at Rs 25.10.
Management control IOC, which currently controls an 8.9 per cent stake in HPL, apparently offered such a high price to gain management control of the company against TCG’s holding of approximately 41 per cent.
The share transfer proposal is currently stayed (till January 10), following a December 10 order of the Supreme Court allowing TCG to approach the ICC International Court of Arbitration of Paris to settle the ownership dispute.
TCG is claiming ownership over the disputed shares to take its tally to 51 per cent, under a private treaty entered between the two promoters in 2002.
TCG head Purnendu Chatterjee did not confirm participation in the proposed rights issue. However, he said the group is willing for an out-of-court settlement of the ownership dispute.
New solution
“I have proposed a comprehensive solution to the problem, including an out-of-court settlement,” he said.
According to sources, State nominees refused TCG’s proposal in today’s board meet.
Meanwhile, TCG submitted a prayer at the Calcutta High Court contesting the process of offering first right of refusal by WBIDC.
It cited that issuing a notice on October 10 was a violation of the court order, since there were already pending legal cases on transfer of HPL’s shares.
The matter will come up for hearing again on January 7.