TCG seeks to acquire IPCL by negotiatied route

TCG seeks to acquire IPCL by negotiatied route

NEW DELHI, JAN 4: Calcutta-based The Chatterjee Group (TCG), shortlisted for becoming strategic partner in Indian Petrochemcials Corporation, has sought to acquire government stake in IPCL through direct negotiations even as TCG's joint bidding partner Indian Oil Corporation took an opposite line.

Purnendu Chatterjee, owner of TCG, which jointly bid with IOC for 25 per cent government stake in petrochem PSU, wrote to the government to "find an appropriate mechanism of diversting IPCL" through a `negotiated sale'.

TCG's offer comes within weeks of government deciding to bifurcate IPCL to sell Baroda plant to IOC on a negotitated basis while other two plants through international bidding. In the process, government reversed its earlier decision of divesting stake in the combined entity for which TCG-IOC combine and Reliance were shortlisted.

Disinvestment Ministry officials declined to comment on the letter saying they had not received it. When contacted, IOC officials said that a new company Indian Oil-TCG Petrochem India Ltd ((ITPL) was formed for jointly bidding for government equity in IPCL.

"But we are going alone for acquiring Baroda Plant. Even for the remaining two IPCL plants IOC will bid alone," they said while adding that joint venture with TCG would look for other opportunites. Chatterjee was not immediately available for comments.

Chatterjee's communication said that sale of government equity to ITPL through a negotiated sale could help government realise maximum value. "In order to render the transaction value to be fair toboth sides, government could obtain fairness opinions from investment bankers or consultants," the letter said.

In case government did not find this route acceptable it should bifurcate IPCL in a manner where IOC could maximise value from assured naptha supply while the potential acquirers for the balance got the full marketing organisation and gas based operations of IPCL, it said.

Chatterjee is a co-promoter of Rs 5170 crore Haldia Petrocheimcals Ltd (HPL) along with West Bengal and Tatas. IOC is also considering a proposal sent by HPL for equityparticipation as promoters were forced to take recourse to debt due to restricting market conditions that forbade them from making a public offer.

Out of the authorised capital of Rs 1979 crore, the promoters chipped in over Rs 1000 crore while contemplating to mop up the rest from the market. The balance was mopped up through loans as a proposalfor additional equity by promoters fell through, sources said while pointing out that despite the financial difficulties the project was commissioned and operationalised by February last year.