GAIL India Ltd has sought more time to bring in Rs 332 crore (Rs 3.32 billion) and pick up between 16-18 per cent stake in Haldia Petrochemicals Ltd as part of the company's restructuring process.

GAIL's equity participation plan was approved by the corporate debt restructuring (CDR) cell, comprising financial institution and banks. A time limit of three months was imposed.

According to the package offered by the CDR cell on January 22 this year, GAIL had to invest Rs 200 crore (Rs 2 billion) by March 31 and another Rs 132 crore (Rs 1.32 billion) by April 30.

GAIL was unable to meet the deadline as the management team was busy with its public issue. The forthcoming general election may delay PIB clearance as well.

When contacted, Proshanto Banerjee, chairman and managing director of GAIL, confirmed the development. "We have sought an extension given the fact that PIB and CCEA approvals may take minimum three month. I am hopeful that our plea will be looked at favourably," Banerjee told Business Standard.

In a letter written to the CDR committee, GAIL said it would be submitting the requisite documents to ministry of petroleum and natural gas (MoP&NG) 'very shortly'. The letter said the GAIL board, in its meeting on March 29, 2004, discussed its equity participation, post CDR package, and agreed to invest Rs 332 crore (Rs 3.32 billion) in HPL, subject to necessary approval from the government of India.

The PSU major has requested for an urgent meeting with the CDR to settle these issues. GAIL is now working on the share holders agreement (SHA) and share subscription agreement (SPA) with the existing promoters of HPL, The Chatterjee Group (TCG), government of West Bengal (GoWB) and Tata Sons.

HPL's CDR package called for fresh capital infusion of not less than Rs 600 crore (Rs 6 billion). While GAIL would invest Rs 332 crore (Rs 3.32 billion), the rest would be brought in by an initial public offer, underwritten by TCG.

Following the IPO and a partial conversion of debt into equity by lenders, HPL's equity will swell by Rs 740 crore (Rs 7.40 billion) to Rs 2,000 crore (Rs 20 billion).

The company, which posted huge loss of over Rs 1000 crore (Rs 10 billion) in last two fiscal, is expected to turn around in 2003-4, driven by reduction in debt cost by CDR cell and improvement in tolling margin for petrochemical products.