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IOC plans Bengali state share buyout

25th May 2012

Oil and natural gas corporation, Indian Oil Corporation keen to invest in Haldia Petrochemicals Limited

IOC - which already has an 8.62 per cent equity holding in Haldia

The West Bengal government has received two investment proposals for the struggling Haldia Petrochemicals Ltd (HPL), which is in desperate need of funds for a turnaround, from oil majors Indian Oil Corporation (IOC) and ONGC.

A team from IOC - which already has an 8.62 per cent equity holding in the state petrochemical giant through an investment of Rs 150 crore - met industries minister Partha Chatterjee and discussed a potential buyout of the state government's 40 per cent shares on Thursday.

Chatterjee will meet ONGC chairman S Vasudeva and U K Basu, managing director of ONGC's refinery arm MRPL, in the first week of June. ONGC has already written to the government showing interest in HPL. "We are keen on buying stakes of the Bengal government. It is a forward integration for us," an MRPL official said.

TOI had earlier reported that IOC had evinced interest on management control of HPL.

The IOC delegation that met Chatterjee was led by director (planning and business development) A M K Sinha. Significantly, it was the first meeting between the top IOC management and the new state government. WBIDC MD Nandini Chakraborty and new commerce and industries secretary Alapan Bandyopadhyay were also present at the meeting.

"IOC has evinced interest in HPL. This is good because they are already an equity partner. We told IOC the state government will accept a nominee director from the oil giant to be inducted into the HPL board," Chatterjee said after the hour-long meeting.

He pointed out that besides equity infusion, issues like naptha supply were also discussed. IOC supplies 20 per cent of the naptha requirement, the main feed stock, of HPL.