Haldia Petrochemicals to issue 51.2 cr fresh shares

KOLKATA: The board of loss-making Haldia Petrochemicals ( HPL) has decided to issue 51.2 crore fresh equity shares at Rs 25.10 each through a rights issue in an effort to save the company from being declared sick.

“After detailed study and looking at various options available, the HPL board arrived at a conclusion that the only option available before the company to avoid making reference to BIFR and its revival through fresh infusion of funds, is to go forward for a rights issue of equity shares inviting its existing shareholders to subscribe in 51.2 crore equity shares at a price ofRs 25.10 per share being the discovered price which emerged from the disinvestment process by WBIDC,” the company said in a statement.

Following a board meeting on Tuesday, Commerce and Industry minister Partha Chatterjee said that it was an effort to save the company, adding that the issue will be completed in a month.

Purnendu Chatterjee from The Chatterjee Group, one of the principal promoters of HPL, said the company requires fund infusion.

“We have already suggested a comprehensive package to salvage the company from its present position.” He, however, did not comment on the appropriateness of the rights issue. Nevertheless, 51.2 crore shares at Rs 25.10 clears the way for infusion of Rs 1,285.12 crore into the company. Of this, West Bengal Industrial Development Corporation (WBIDC), which holds 39.99% including a disputed chunk of 9.18%, will have to shell out Rs 514 crore to subscribe to the rights issue.

The dispute is over the ownership of 15.5 crore shares which the TCG group claims to be theirs while the state government insists it is theirs, with TCG taking the matter to the courts. In its latest ruling, the Supreme Court has asked the state government to maintain status quo with respect to the share and has barred it from transferring to any other party.

However, the fate of the rights shares issued against the disputed 15.5 crore shares isn’t clear at this stage. According to experts, the shares could be issued without allotting them to any party till the time the ownership of the disputed chunk is determined.

Justice I P Mukerji of the Calcutta high court in a hearing on Tuesday also said the disputed shares cannot be transferred without leave of the court.