Orders transfer of shares held by Bengal Govt

Our Bureau

New DelhiJan 31An end to the Haldia Petrochemical imbroglio seems in sight with the Company Law Board upholding the allotment of 150 million shares in Haldia Petrochemicals Ltd to Indian Oil Corporation (IOC).

In an order on Wednesday, the Board has said that it is at liberty to deal with these shares in any manner. Further, the Board confirmed the transfer of 155 million shares by West Bengal Industrial Development Corporation Ltd (WBIDC) at Rs 10 per share to the petitioners.

The petitioners include Chatterjee Petrochem (Mauritius) Co, Winstar India Investment Co Ltd, India Trade (Mauritius) Ltd and Chatterjee Petrochem (India) Pvt Ltd.

The order directs Chatterjee Petrochem (India) Pvt Ltd to pay Rs 125 crore to WBIDC towards the balance consideration for the 155 million shares on or before February 28 this year.

The order states that the petitioners are at liberty to take control of the day-to-day management of the company as soon as they pay for the 155 million shares, as they would hold majority equity of 52 per cent.

Valuer's appointment

Furthermore, WBIDC and the West Bengal government have been asked to transfer 520 million shares held by them in Haldia Petrochemicals Ltd to the petitioners. The fair price for the 520 million shares shall be determined by a valuer to be appointed by it or Rs 28.80 per share, whichever is higher, the CLB has said

To determine the fair price for these shares, the parties have been asked to appear before the CLB Chairman, Mr S. Balasubramanian, on February 20 to suggest a mutually acceptable valuer. The consideration for the 520 million shares shall be paid within 45 days of the valuation report or within 60 days if the State Government and WBIDC say they do not want any valuation, the order adds.

Bank guarantee

The petitioners have been asked to not only deposit with WBIDC an irrevocable bank guarantee of Rs 50 crore but also a comfort letter of Rs 1,500 crore with the State Government.

If the petitioners, however, fail to pay and acquire 520 million shares held by WBIDC within the stipulated period, then the Corporation will be at liberty to encash the Rs 50-crore bank guarantee. Besides, the State Government and corporation shall also have the option to purchase the shares held by the petitioners at Rs 28.80 per share or the fair price determined by the valuer. This will, however, not apply to the 155 million shares, the price of which will only be Rs 10 per share.

The petitioners shall purchase the 271 million preferential shares held by the State Government and WBIDC at par, the order adds.

(This article was published in the Business Line print edition dated February 1, 2007)
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