The Chatterjee Group (TCG) is in talks with global energy companies to rope them in as equity partners in its upcoming petrochemical project in Odisha and is also on the lookout for partners and strategic investors for its project Tamil Nadu.
Sources aware of this development told Business Standard that while TCG is looking at a 2:1 debt-equity ratio to fund these projects, the group will also be approaching investors and banks to raise capital in the next six months.
The group, owned by NRI businessman Purnendu Chatterjee, will be investing around Rs 78,000 crore in Odisha and Rs 50,000 in Tamil Nadu. However, it alone will not bear all the investments.
“The estimated investments will take place over a five-year time horizon and as projects keep coming up, funds will be needed. TCG is in talks with global companies both as equity partners and as strategic investors,” a source said.
The project in Cuddalore, Tamil Nadu, which has port access, is expected to come up first. TCG’s flagship company, Haldia Petrochemicals Ltd (HPL), after clearances from NCLT, is poised to take over 2,100 acres of land hitherto with Nagarjuna Oil Corporation Limited (NOCL).
NOCL is facing liquidation. Besides HPL, Accord Distillers & Brewers and Adani Ports & Special Economic Zone had also submitted bids during the liquidation process.
“While the land with NOCL is readily available, it needs to be acquired first in Odisha, which will take some time. Thus, it is expected that the petrochemicals project in Tamil Nadu will start first not Odisha,” a source in the knowhow told this newspaper.
The source said that just after NOCL had started construction of a refinery, the company was admitted into NCLT and thus, most of the land is vacant. HPL will be coming up with a petrochemical project rather than the refinery that NOCL had planned.
The Odisha government has started the process of land acquisition of about 3,320 acres in Balasore, which is near the upcoming Subarnarekha port. This project is expected to have a 1.08-mtpa polyethylene unit, a 1.6-mtpa paraxylene plant, and another 1.25 mtpa of purified terephthalic acid, besides a light crude oil refinery. Aromatics complex and ethylene complexes would be set up.
According to the source, while work can be started in Tamil Nadu within six months after clearances from NCLT, the project in Odisha may take around two years to start as the land acquisition process has to be first completed and the necessary environment and forest clearances have to be obtained.
In Odisha, of the total land to be acquired, 900 acres is held privately while 700 acres is forest land. The state government has around 800 acres and the rest is a mix of Bhoodan land and others.
Industry officials are of the view that land acquisition of this proportion is a sensitive matter in the state, given its past experience when South Korean firm Posco backed out owing to land issues.
When asked about these developments, a TCG official did not comment.
While TCG has decided to invest heavily in Tamil Nadu and Odisha, it will maintain the status quo on its operations in Haldia in West Bengal.
Sources said the decision has been taken considering the congestion around Haldia port which the group feels is unable to handle more loads.
“Unless Haldia port is able to handle more cargo and the congestion is addressed, it is unlikely that the existing TCG facility in Haldia will be scaled up”, the source told this business daily.
TCG had entered petrochemicals in India back in 1994 by setting up the Haldia project.
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