Around this time last year, Haldia Petrochemicals facility was dangerously ill. As the promoters — the West Bengal government and The Chatterjee Group (TCG) — fought a battle for control, the company’s net worth eroded. Production came to a halt.

A large number of engineers and skilled workers left the company. Cut to January 2016. HPL, now controlled by TCG, has completed 10 months of operation posting an EBITDA (earnings before interest, taxes, depreciation and amortization) of nearly ₹2,000 crore, or a whopping 25 per cent of turnover.

The cash generated is enough to make profits after servicing bank loans. This is surely one of the biggest turnaround stories of India Inc.

And, much of the credit should go to State Bank of India (SBI) and its chairman Arundhati Bhattacharya for taking the risk of offering funds to the company, in January 2015.

Huge complications This was despite SBI’s sizable exposure in HPL that hadn’t seen good days for nearly a decade.

The company had failed a corporate debt restructuring programme, too. And, as per banking norms, it was not entitled for further support unless it changed its ownership.

True, the promoters were now walking the talk to end the ownership crisis.

But no lender was ready to take them seriously and, not without reason.

The Mamata Banerjee government, which that took over management control with the help of lenders in June 2012, demanded ₹25.10 a share to handover 31 per cent undisputed shares to TCG.

The price was derived through an auction in October 2013 when HPL was operational. IndianOil, which has 9 per cent stake in HPL, offered the astronomical price based on the State’s promise to hand over a total of 40 per cent of the stake. The offer included 9 per cent disputed shares.

The State was now demanding the same price for a lower stake in a financially weaker HPL. But, TCG agreed to the ₹1,305-crore deal to up its stake from 41 per cent to absolute majority.

It promised to pay ₹653 crore in the first tranche and the rest in instalments. Except SBI, none of HPL’s 28 lenders was ready to take such promises seriously.

There were doubts if TCG would be able to raise the requisite finance from foreign sources (Indian banks don’t pay for domestic acquisition) for investing in a liability-ridden company that too in a difficult global situation.

It was a promise that could sour and SBI could end up finding itself at a sticky wicket. Indeed, late in 2015, SBI had to do some answering to the regulator as TCG was taking time to complete the deal that was finally sealed on December 31.

Ownership was not the only complication. Mismanagement between 2012 and 2014 had led to duty violations inviting a ₹1,250-crore slap from the Department of Revenue Intelligence.

The risk that paid off The company also breached contractual obligations to a Central government-owned company. Either incident could have proved fata, unless Delhi extended a helping hand. Back in end January 2015, therefore, when the SBI chief was sanctioning working capital refinance to the company, she didn’t have much to rely on except a few promises and an optimistic projection riding on improved market conditions in petrochemicals sector.

Bhattacharya decided to take the plunge. The bank took the lead in convincing the RBI to allow refinance against promised change in ownership.

Fresh capital flowed through a transfer and retention account that would handhold the company to recovery. And, it did show result within two months. As HPL started generating cash, far in excess of projections, other banks started joining the consortium.

As things now stand, HPL’s debts have been recast for the second time. TCG is in the driver’s seat.

While TCG chief Purnendu Chatterjee didn’t respond to queries, he has his options open to raise finances. Rumours fly that an IPO is coming.

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