24 December 2012 07:24 [Source: ICIS news]
KOLKATA (ICIS)--An Indian consortium of Mangalore Refineries and Petrochemicals Limited (MRPL) and Indian Oil Corporation Limited (IOC) is unlikely to bid for the 43.29% equity stake in Haldia Petrochemicals Limited (HPL) that is currently held by the provincial government of West Bengal, a senior official in IOC said on Monday.
“The MRPL-IOC consortium was not willing to participate in competitive bidding for the West Bengal government’s equity stake in HPL scheduled to be completed by March 2013 since the acquisition would not lead to management control of petrochemical company,” the official said.
“The West Bengal government will appoint advisors for its stake sale in the next few days but there was no clarity whether other existing equity holders in HPL would divest or not,” the official said.
“The acquisition of West Bengal government holding would not give the consortium management control and lack of it would not ensure synergies between refinery operations of IOC-MRPL and [the] existing naphtha cracker of HPL,” the official added.
The principal promoters of HPL were The Chatterjee Group (44.21%), West Bengal government (43.29%), IOC (9.62%) and the balance held by the Tata Group.
The West Bengal government's holding would be auctioned with The Chatterjee Group offered the first right of refusal and if it declined to match the offer, the 43.29% holding would be transferred to the highest bidder, according to an official of the West Bengal government.
Since both The Chatterjee Group and the West Bengal government were engaged in tussle over transfer of equity before courts and arbitration, there might be opportunity for a successful bidder to increase equity participation in HPL and gain management control and such uncertainty was not in interest of the consortium, the IOC official said.
HPL runs a petrochemical complex at the port town of Haldia in eastern Indian province of West Bengal with a nameplate naphtha cracking capacity of 670,000 tonnes/ year.
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