New York-based venture capitalist and founder of The Chatterjee Group (TCG), Mr Purnendu Chatterjee, and the Mamata Banerjee-led West Bengal Government is working out a common strategy to resolve the legal tangle over ownership issues in Haldia Petrochemicals Ltd (HPL).

While the possibility of an out-of-court settlement is ruled out by both the partners, efforts are on to convince the Supreme Court to pass an early judgment on the issue.

Sources in both the quarters confirmed that plans were afoot to jointly “appeal” before the apex court to expedite its judgment on the issue so as to ensure smooth operations of the standalone petrochem project. The hearing on the petition filed by TCG was already over. The case was filed during the Left Front rule.

While details of the legal strategies are not known, sources told Business Line that unless the ownership issues were resolved, HPL could not approach either potential investors or financial institutions to raise resources for future growth as well as restructuring the ballooning debt-burden.

HPL has accumulated loss of nearly Rs 1,000 crore.

As part of the corrective steps, Ms Banerjee's government had successfully convinced the Centre to withdraw the import duty on naphtha, bringing home a savings of Rs 350 crore for HPL. Also Mr Chatterjee was allowed officiate as Chairman of the company, through a temporary arrangement. He was previously the Vice-Chairman of the joint venture company.

The steps, coupled with some improvement in market conditions, have helped the company to post a positive EBIDTA (earnings before interest, taxes, depreciation and amortisation) in July as against a cash-loss in the first quarter of this fiscal. “If the current trend persists, our cash-flow situation will improve substantially by September,” a company source pointed out.

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