The Board for Reconstruction of Public Sector Enterprises (BRPSE) will soon consider a final revival package for Madras Fertilisers Ltd (MFL). The package is based on a report by consultancy firm Project & Development India Ltd (PDIL), sources said.
MFL managed to bounce back to black from deep red during the financial year ended March 31, 2010, thanks to the new pricing scheme ? stage III (NPS III) announced by the Centre last year. The NPS III made MFL?s urea business viable, helping the company post a net profit of Rs 6.88 crore over a turnover of Rs 1,302.84 crore in fiscal 2010. The new scheme had provided MFL an additional benefit of Rs 3,073 per tonne of urea from April, 1, 2009 for a period of one year. This had brought a windfall gain of Rs 112.92 crore to the bottom line.
The centre?s concession scheme, announced in April 2008, made MFL?s NPK complex fertiliser business profitable, with a lag effect. A turnaround result was an essential condition set by BRPSE for considering the new revival package for the PSU. ?PDIL had been entrusted with a study to examine the long-term viability and improving technical and energy efficiency of MFL. The report submitted by PDIL is under examination and the management would finalise a restructuring proposal based on the report,? the company said.
During the last meeting of the BRPSE, secretary, department of fertilisers had said that the financial restructuring of MFL was an imperative to wipe out its accumulated losses and to pull the PSU fertiliser firm out of the BIFR net. The department was also in talks with authorities to make registered liquified natural gas (R-LNG or LNG procured under long-term agreement) available from suppliers by floating global tenders. This would help the company shift its feedstock from naphtha to gas. In its last order, BRPSE directed the department to provide gas linkage to MFL so as to make the company economically viable.