Indorama Ventures Eyes Stake In Haldia Petrochemicals

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Indorama Ventures Public Co. Ltd, the Bangkok-based chemicals maker controlled by the Lohia family, is in initial talks with The Chatterjee Group (TCG) to buy a stake in Haldia Petrochemicals Ltd (HPL), according to media reports.

TCG, promoted by non-resident Indian businessman Purnendu Chatterjee, owns close to 48% in Haldia Petrochemicals. A stake sale will require approval from the West Bengal government which owns close to 31% stake in Haldia Petrochemicals, the reports state.

"It is not yet decided whether Indorama will acquire a part of TCG's 48% stake or also from other shareholders as well, which also includes Tata Group, Indian Oil Corp. and the company's lenders," the reported quoted industry experts. Tata has around 2.3% stake, Indian Oil around 7% and lenders around 6% stake in Haldia Petrochemicals.

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Haldia Petrochemicals has a naphtha-based petrochemical complex at Haldia, about 125km from Kolkata. The plant was commissioned in 2000 and the company is one of the largest in India in terms of production capacity.

TCG, which took over management control of Haldia Petrochemicals in 2015 from the West Bengal government after settling a prolonged ownership feud, is keen to bring Indorama as a strategic partner and co-investor as it looks to scale up operations in Haldia, the people cited above said.

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TCG has also acquired a majority stake in Mitsubishi Chemical Corp.'s Indian subsidiary, MCC PTA India Corp. Pvt. Ltd, for close to US$ 48 million last year. The distressed assets deal rescued the ailing MCC PTA, a producer of purified terephthalic acid, or PTA (a precursor to polyester), from potential closure as Mitsubishi Chemical decided to scale back investments in commodity chemicals such as PTA to focus on other businesses.

Around the same time in September, Indorama Ventures formed an equal joint venture with Kolkata-based Dhunseri Petrochem Ltd to produce polyethylene terephthalate (PET) resins, a raw material used in textile and plastics industry. Dhunseri Petrochem's PET resin business with a 480,000 tonnes per annum plant in Haldia, was transferred to the newly formed company Dhunseri Petglobal Ltd, according to the agreement.

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TCG is also looking to raise capital to fund the expansion of its petrochemicals business, it is learnt.            

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