Haldia Petrochemicals foreign equity to be stepped up to 71%
Veeshal Bakshi
NEW DELHI, January 18: Foreign equity in the Rs 5,170-crore Haldia Petrochemicals Ltd (HPL) project is being hiked to 70.84 per cent from 21.9 per cent. Of this, $300 million is proposed to be raised as interim arrangement from international capital markets.The equity capital base of the company has been revised to Rs 1,979 crore, of which Rs 1,402 crore will come as foreign equity. Chatterjee Petrochem (Mauritius), the foreign collaborators, will bring in 22 per cent while the balance 48.84 per cent will come from overseas capital market. The company has decided to come out with three types of instruments to raise this money. The Foreign Investment Promotion Board (FIPB) has cleared the company's proposal to raise interim funds from overseas markets in view of HPL's inability to raise money from the domestic market owing to the slump in the stock market. The company had earlier planned to raise Rs 969 crore from a public issue in the domestic market. The Cabinet Committee on Foreign Investment (CCFI)
has already cleared the project. Official sources said that since there were no substantial changes in the basic parameters of the project proposed in the company's latest application, a fresh approval from the CCFI is not required. HPL plans to make a private placement of $100 million to international investors with an option to issue global depository receipts (GDR) and American depository receipts (ADR) in lieu of equity. These will be issued at a premium to be decided subsequently after detailed negotiations. Another $100 million will be raised from private placement of foreign currency convertible bonds to be converted at the time of an initial public offer. These will also incorporate an appropriate premium at the point of conversion. The company also plans to issue foreign currency bonds worth $100 million repayable from an initial public offering. The initial public offer (IPO) could have both domestic and foreign investors. Interestingly, though the company has got the government's approval to
raise $300 million, it has stated that the actual funds raised would not be more than $269 million, which is equal to the Rs 969 crore initially proposed to be raised from the domestic public issue. The company is setting up an integrated naphtha-based petrochemicals complex to manufacture 2.10 lakh tonnes per annum (tpa) of polypropylene, 2 lakh tpa polyethylene and 1.2 lakh tpa linear low density polyethylene. The company also plans to manufacture ethylene, mixed C4'S, raw pyrolysis gasoline, butadine, C4 raffinate, benzene, hydrogenated pyrolysis gasoline, fuel oil and C6 raffinate.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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