FACT likely to receive Rs 240-cr central aid

Ajayan

Kochi, Jan 6: Kerala's public sector behemoth Fertilisers and Chemicals Travancore Ltd (FACT) is likely to get a new lease of life as the Centre is formulating a Rs 240-crore financial package for it.

According to sources in the company, the Centre has cleared a financial relief package which includes waiver of interest on loan for four years up to 2001-2002. The package on which the company had been hinging its hopes on for quite sometime is expected to be around Rs 240 crore. Sources added that the final approval of the Union Cabinet for the package was expected very soon.

The company expects to go in for a few new projects as the Centre is expected to enhance the Plan fund during the 10th Plan to Rs 300 crore. The projects, the company is considering are the 900 tpd sulfuric acid plant at the Cochin division. Another project is the LNG conversion for its two ammonia plants and improvements at the petrochemical division.

The company also expects a rail connection to its Udyogamandal division. However, even as the plan amount would be Rs 300 crore, the company was expected to raise Rs 100 crore for these projects, the sources added.

According to sources, the revised subsidy formula for phosphatic fertilizers was likely to bring in an additional revenue of Rs 40 crore annually.

The company had been passing through a bad patch for quite some time. It had suffered a gross loss of over Rs 151 crore in the last fiscal. In the previous year, the loss was Rs 40 crore. Of this, Rs 99 crore was towards interest payment and Rs 97 crore towards depreciation charges. Reasons for the mounting loss include high price of naphtha which is used as feed stock for the ammonia plant, interest to be paid for the loans taken for the ammonia plant, fall in caprolactum sales and low urea production.