05 October 2001 03:26 [Source: ICIS news]
SINGAPORE (CNI)-- India's debt-laden Haldia Petrochemicals (HPL) made a net loss of Rs14.8m ($310,000 Euro337,000) in its financial year ended 31 March, 2001, on net sales of Rs86.6m. This is their first financial report.
HPL's annual report, just released, does not show interest payments on secured loans of Rs34.8 billion that the company has accrued since commissioning a 420 000 tonne/year cracker, PE and PP plants in Haldia in 1999.
A spokesman says the reason why interest charges are not shown in the report is because the company only started commercial production in August 2001.
"We wanted to wait until certain quality issues were resolved, so depreciation and loan expenses before August 2001 were capitalised and added onto the project's cost," the spokesman said.
The annual report shows that HPL's debt rose to Rs34.8bn by the end of the 2000-2001 financial year from Rs32bn earlier.
Pressure is mounting on HPL to restructure its equity and debt following a warning from Indian Oil Corp (IOC) that it will not go ahead with negotiations to take a 26% equity stake in the company unless debt restructuring takes place. Progress has been slow due to a 50% gap in valuations by the two companies.
IOC recently urged HPL's creditors and three promoters - The Chaterjee Group, the West Bengal Industrial Development Corp and the industrial conglomerate, Tatas - to make sacrifices to save the company. IOC has also given a debt restructuring proposal to HPL for consideration.
HPL's creditors include the Indian financial institutions the IDBI, the ICICI and the Industrial Finance Corp of India.
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