The Union government has set up a committee of experts to study how land held by the Fertilisers and Chemicals Travancore Limited (FACT) can be leveraged for the revival of the company.
The committee comprises two experts, a senior official of the Department of Fertilisers, Principal Secretaries to government of Kerala for Revenue and Industries and chairman and managing director of FACT.
The constitution of the committee comes in the wake of FACT turning down repeated requests from the State government for 150 acres at Ambalamugal for a petcoke-fired power plant. The requests were turned down because the company management felt it was a matter between the Union and the State governments and a Cabinet decision would be required for the land transfer.
‘FACT not to sell land’
Sources said FACT did not intent to sell or monetise its land holding, roughly 2,000 acres spread over two campuses at Udyogamandal and Ambalamugal.
“For FACT, leveraging the land is now an imperative because the Union government has advised the management to use internal resources to fund a revival programme,” sources said.
Revival package
They said the possibility of infusion of Rs. 991 crore as recommended by the Board for Reconstruction of Public Sector Enterprises (BRPSE) remained remote.
Meanwhile, the management has requested the government to convert FACT’s loans and interest there on amounting to Rs. 550 crore into equity or to offer a waiver to enable the company to raise much-needed working capital.
FACT now pays interests to the tune of Rs. 200 crore a year. If the loan and interest are waived, the company can save up to Rs. 50 crore a year.
Considering the current financial circumstances, even the waiving of loan and interest and savings there on will only be a temporary relief.
“Long-term solution will involve FACT getting LNG at a feasible rate and raising a substantial sum of money using its land holding to fund its revival project,” sources said.
