Financial Daily from THE HINDU group of publications
Thursday, Mar 06, 2003
Financial Daily from THE HINDU group of publications Thursday, Mar 06, 2003 |
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Corporate
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Outlook Haldia Petrochem hopes to lower losses this fiscal — But capital recast still elusive Indrani Dutta
KOLKATA, March 5 HALDIA Petrochemicals Ltd (HPL), the beleaguered joint venture involving the West Bengal Government, the Tatas and the Chatterjee Group, is hoping to end this fiscal with a substantial reduction in its net loss. HPL sources told Business Line that the company had begun to report substantial earnings before depreciation, interest and tax (EBDIT) for it to ``become confident of the future''. HPL, which faces a monthly interest obligation of Rs 45 crore, is having an EBDIT of Rs 46 crore on an average since December 2002. ``This allows us to cover our interest," the sources said. The sources said HPLs, previous highest EBDIT was Rs 30 crore earned in March 2002. Although this high a rate of payout was not justified, HPL would have to wait for its restructuring proposal to get through with Industrial Development Bank of India and the other lending institutions till it can hope to get any breather. The recast was conditional upon HPL injecting some fresh funds. However, the company has not been able to fulfil its obligations in this regard till February 28, the sources said. HPL — which now commands a No 2 position in the polymer market after Reliance Industries Ltd (RIL), suffered a net loss of Rs 501 crore in 2001-02 after eight months of commercial operations. Its accumulated losses stand at about Rs 537 crore. "Almost throughout the entire current fiscal HPL has had a positive EBIDT and net loss is expected to be substantially hemmed in," the sources said. However, the quantum would depend on the naphtha prices, which have shown a rising trend of late. Sales turnover is expected to be of the order of Rs 3,000 crore in 2002-03. Although there has been little to cheer about on the financial recast of HPL now awaiting the nod of the banks and FIs led by IDBI, the sources said that talks on securitising the deals signed with Gas Authority of India Ltd (with which HPL is seeking an equity tie-up), for some marketing arrangements was progressing. However, no active discussions were being held with the IDBI now according to the sources. HPL has missed all four payment schedules on its debt to IDBI till now and the lenders are slated to meet later this week to discuss their exposure which now stand at about Rs 4,600 crore. The Tatas, who had announced their decision to exit the company since petrochemicals was not their core area of business, are still on the board although Mr Ratan Tata has stepped down. "A Tata representative attended HPL's board meeting held in New Delhi on February 27 which was also attended by lenders' representatives on HPL board," the sources said. With their Rs 180-crore equity, the Tatas now have a 15.6 per cent holding in HPL's Rs 1,153-crore equity, while the State Government has a 46.8 per cent share with a contribution of Rs 540 crore. Mr Purnendu Chatterjee has a 37.6 per cent holding through a Rs 433-crore contribution held through Chatterjee Petrochem (Mauritius).
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