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In a fresh lease of life to the suspended ₹3,500-crore Nagarjuna Oil Corporation Ltd, the National Company Law Tribunal (NCLT), Chennai, has approved Haldia Petrochemicals’ scheme to revive the refinery project.
The proposal under Section 230 was submitted by NOCL liquidator V Mahesh. While the order is awaited, Mahesh and a senior official at Haldia Petrochemicals confirmed the development.
The project in Cuddalore, about 175 km south of Chennai, was to go onstream in 2012 but various delays escalated the cost by nearly three times before the project came to an abrupt halt in December 2011 following a cyclone.
A consortium of 14 banks that funded the project were to bring in an additional ₹7,000-crore debt as part of a restructuring plan, which, however, did not materialise. Insolvency proceedings were initiated against NOCL by an operational creditor.
Hope for PCPIR
The project was designated as the anchor unit of the Petroleum, Chemicals and Petrochemical Investment Region to be established in Cuddalore and Nagapattinam districts.
The company has 2,158 acres of un-litigated contiguous piece of industrial land, ideally located near to the sea and CRZ compliant; near to railway siding with access to Puducherry airport and Karaikal port.
The State government in the last couple of years has been trying hard to revive the project and turn it in to a major petrochemical park that could bring in investment of over ₹50,000 crore.
In December 2018, the NCLT, Chennai, ordered liquidation of the company, which is an associate of Nagarjuna Oil Refinery Ltd.
Fresh attempt
The liquidator called for Expression of Interest and to finalise a scheme submitted by any interested company, after considering various aspects. The project’s revival took a turn in 2019 when three companies — Adani Ports and Special Economic Zone Ltd, Haldia Petrochemicals Ltd and Accord Distillers and Brewers Pvt Ltd — evinced interest in the assets (on ‘as is where is’ condition) of NOCL.
Finally, Haldia Petrochemicals submitted a scheme in October 2019. In October 2020, the liquidator filed a company petition seeking approval for the Scheme of Compromise or Arrangement proposed between the Secured Financial Creditors of NOCL and Haldia Petrochemicals Limited (Scheme Proponent).
Incidentally, in September 2019, Haldia Petrochemicals signed an MoU with the Tamil Nadu government to invest nearly ₹50,000 crore in Cuddalore district mainly to convert the NOCL facility into a petrochemical complex.
A high-level team from Haldia Petrochemical represented by its Chairman and Managing Director Purnendu Chatterjee also met Chief Minister Edappadi K Palaniswami in February 2020 on the project.
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