UBI halts funding for Haldia Petrochemicals

United Bank of India (UBI), a member of the consortium of lenders to Haldia Petrochemicals Ltd (HPL), will not extend any further financial assistance to the company, according to local press reports.

HPL recently restarted operations after a seven-month period of closure beginning in July 2014. Loans from TCG (Rs.100 crore) and State Bank of India (Rs.500 – 600 crore) enabled the company to resume production. Around Rs.900 crore was required to restart operations at the plant, while a sum of approximately Rs.2300 is needed for the entire financial restructuring of the company.

Officials from UBI, which has already loaned Rs.275 crore to Haldia Petrochemicals, noted that HPL had turned into a non-performing asset (NPA) and the decision to discontinue credit was in view of the restrictions imposed on the lender by the Reserve Bank of India. HPL is currently running at approximately 50% of its installed capacity in the absence of credit from banks such as UBI.

Edited from various sources by Rosalie Starling

Sources: Business Today, Telegraph India

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