A meeting of the board of the Oman India Fertiliser Company has been convened in the second week of September to discuss vital financing issues, said sources.

The delay in projected date of financial closure from December 1998 by three months follows the recent withdrawal of the export credit agency of France, Coface, from the consortium providing export guarantees to the proposed ammonia-urea complex at Oman. This has led to delays in tying up the finances.

Further, a change in the debt-equity ratio of the project is being negotiated between the joint venture partners, to increase the equity portion.

"The financial closure has been delayed by at least three months. Negotiations for tying up finances, which would have otherwise been completed by now, are currently going on," said senior officials from the department of fertilisers.

With the disinterest shown by Coface to participate in the consortium, negotiations are now on with other export credit agencies like Japan Exim and Belium Exim to provide export guarantee for the project. The consortium includes Banque Nationale de Paris (BNP) and JP Morgan.

The project would also see a change in the debt-equity ratio (3:1) of the project. With no objection on the part of the joint venture partners, the equity portion of the project will go up to 33 per cent of the equity from the existing 25 per cent, said sources. In addition to this, 5 per cent will be kept as "stand-by" equity. The debt portion would be reduced from 75 per cent to 67 per cent.

The debt portion of the project would thus reduce to $750 million from the earlier envisaged $840 million, while the equity will increase to $450 million from $360 million.

The Oman India Fertilizers Company was instituted in February with the formation of its board of directors. Salim Hassan Macki of OOC was selected as the first chairman of the company in February. The chairmanship will be rotated periodically between Oman and the Indian counterpart.

The preferred bidder for the engineering contract is the Snamprogetti-Technip consortium. It will take 33 months for the project to go onstream.

The project encompasses a world class ammonia-urea complex which will produce 3,600 tpd of ammonia and 4,400 tpd of granulated urea. The entire urea produce will be lifted by the Indian partners as per the agreement. RCF has already initiated seeding exercise for granulated urea in India to familiarise the Indian farmer who has been using only prilled urea.

Meanwhile, at the inauguration of RCF's Rs 91-crore carbon-monoxide and formic acid plant with a capacity of 10,000 tpa at Thal in Raigad District, the department of fertilisers secretary, AV Gokak, while speaking on the future fertiliser policy, assured that the government will act positively to help grow this vital sector in the economy.

Gokak said that the department of fertilisers has initiated dialogue with the ministry of petroleum and natural gas to explore the possibility of overseas joint ventures to tie-up supply of gas which is in short supply.