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Ratan Tata discusses HPL with Bengal CM

Tata Sons chairman Ratan Tata on Monday held detailed discussions with West Bengal Chief Minister Buddhadev Bhattacharjee over the future of Tata Group's equity participation in the prestigious Rs 51.70 billion Haldia Petrochemicals Limited.

Tata, with a couple of aides, was closeted with Bhattacharjee for over an hour at the state secretariat. Finance Minister Ashim Dasgupta and the Industry Minister Nirupam Sen were also present.

Emerging from the meeting Tata refrained from giving details of the discussions but confirmed that, "we held general discussions about the partnership status in HPL."

The meeting was significant for the fate of the crisis ridden HPL, as the Tata Sons chairman had earlier indicated that the group would pull out of the petrochemical project since it did not fit into its core business.

HPL, the biggest petrochemical project in eastern India, was promoted by the West Bengal government along with the Chatterjee Group of Purnendu Chatterjee and Tatas.

The Bengal government, however, claimed that the Tatas would stay in the project.

"Tatas will stay in the HPL project", Finance Minister Asim Dasgupta said, describing as 'positive' the Tata Sons chairman Ratan Tata's hour-long meeting with the CM in Calcutta.

The state government's keenness to keep the Tatas in the project followed Ratan Tata's earlier indication that it might pull out as HPL did not fit into its core business.

"This is not the business we will continue to be in," Tata had said referring to HPL while addressing the Telco AGM in Bombay on August 14.

The plant started commercial production only on August 1 but was suffering heavy losses due to spiralling naptha prices and heavy interest burden.

Chatterjee is scheduled to meet Bhattacharjee on Wednesday. Subsequently the three promoters would meet on August 31 to reach an understanding over future shareholding pattern of the company.

Purnendu Chatterjee had held a meeting with a top Tata Group official in Bombay on Sunday apparently to discuss the future of the HPL. No details of the meeting was, however, available.

The latest developments on the fate of HPL came in the wake of the efforts by the West Bengal Government to rope in Indian Oil Corporation as the fourth partner in the project.

But the problems for the project had compounded as these efforts failed to yield any positive result with the petroleum major still weighing its options.

While both the Tatas and the TCG remained tightlipped about the future course of action on the project, the state government, however, was striving hard to keep the Tatas on board.

But the HPL desperately needed more equity contribution from the promoters to reduce the Rs 40 billion debt burden of the company.

The three promoters of HPL are scheduled to meet on August 31 to chalk out alternative plans to reduce the debt burden, which had financially crippled the project.

TCG and West Bengal government hold 43 per cent stake each while the Tata's holding was 14 per cent of the Rs 10.10 billion paid-up equity capital of HPL.

With the Tatas already making their intentions clear about pulling out of the project, the question of future holding pattern gains importance as in the absence of any other equity partner, whoever takes up the Tata's stake, would get majority control in HPL.

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