Haldia Petrochemicals seeks more flexible letters of credit

Kolkata, Aug 19 (IANS) Haldia Petrochemicals on Wednesday said it will continue to seek more letters of credit from banks to import raw materials while needing more flexibility in the guarantee.

“We are getting the letters of credit regularly but will need more continuously,” the company’s chief financial officer Ashutosh Bose told media persons on the sidelines of the FICCI Banking Conclave here.

A letter of credit is contractually issued by a bank against its client assuring another financial institution of receiving the amount due on time.

He said since its operations were on a large scale basis, more such bank guarantees are needed. “Banks need to give more flexibility in the letter of credit,” he said.

The fall in crude prices have resulted in the prices of its products falling. However, Bose said the company has been able to maintain its operating margins.

The company which has been operating in full capacity since February this year, has been churning an EBITDA of Rs.200 crore every month.

The Directorate General of Foreign Trade had slapped a fine of Rs.1,250 crore on the company for failing to meet its export obligations.

The petrochemicals company had applied for a four year extension to meet the obligations and is yet to hear back from the authorities.

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