IOC scraps Haldia Petro takeover deal

IOC scraps Haldia Petro takeover dealIndian Oil Corporation (IOC) has reportedly scrapped Haldia Petrochemicals Ltd. takeover deal, giving a tough blow to West Bengal's Mamata Banerjee-led government's plans to divest its holding in the ailing company.

An IOC official has revealed that IOC has decided not to take over Haldia Petro and that the public sector oil giant has asked the state government to refund its earnest money (Rs 200 crore) that it had deposited to participate in the bid.

IOC's decision is being linked with the ongoing dispute between Haldia Petro's two main promoters, viz. the Chatterjee Group and the West Bengal Government.

As per terms of the agreement, the deal was depended upon certain conditions, such as exercise of right of first refusal and outcome court cases over various disputes.  The success of stake sale is possible only in case Purnendu Chatterjee, who owns 41 per cent stake in the company and has a right of first refusal, could match the price bid by the government-run oil giant IOC within the next two months.

IOC reportedly wrote a letter to the West Bengal Government stating that it called off the deal as the Chatterjee Group had yet not given its nod.

Furthermore, the legal dispute over 15.5 crore shares has not been settled yet.  In December, the Supreme Court allowed the Chatterjee Group to approach Paris-based International Chamber of Commerce (ICC) for arbitration while Calcutta High Court put a stay on the deal till 21st of January.  IOC believes that the Chatterjee Group is now better placed to gain a ruling in its favor at the ICC.