18 July 2002 01:50 [Source: ICIS news]
SINGAPORE (CNI)--India's Reliance Industries Ltd (RIL) and Basell are each said to be in separate talks to acquire a majority stake in indebted Haldia Petrochemicals Ltd (HPL), according to a source close to HPL.
The source said the two potential investors had entered the picture only recently after discussions between state-owned Indian Oil Corp (IOC) and HPL appeared to have stalled.
HPL invited IOC to take a 26% stake in the company as well as management control last March. However, IOC's insistence that it should hold a majority stake in HPL has met with resistance from HPL co-owners, The Chatterjee Group (TCG) and the West Bengal government, each of whom own 43% in the company.
It is believed that RIL and Basell submitted expressions of interest only recently, although they have been holding informal talks for some time with the West Bengal government.
Officials from RIL, Basell and HPL were not immediately available for comment.
Industry sources sad acquiring a majority stake in HPL would be beneficial to both RIL and Basell.
The acquisition would give RIL a strong position in petrochemicals in eastern India, which it currently lacks.
For Basell, the HPL stake would be an opportunity to develop its position in the Indian polyolefins industry.
For its part, IOC has said it is still definitely interested in taking a 26% stake and management control in HPL.
A senior IOC source said the company had been consistent in suggesting that it take a majority stake of 26%, with existing shareholders TCG and the West Bengal government taking 24% each, and HPL's creditors taking the balance of 25% by converting debt to equity.
IOC has said it would be unthinkable for it to take management control when it did not control the boardroom.
IOC has agreed to inject Rs4.7bn ($96.2m/Euro95.7m) in equity capital for its 26% stake in HPL to take the company's equity capital to Rs18bn.
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