The ministry of chemicals and fertilisers will soon seek the Cabinet?s approval for a fresh scheme to rejuvenate ailing state-owned units of Fertiliser Corporation of India (FCI) and Hindustan Fertiliser Corporation of India (HFCIL).
The ministry?s idea is to sell a part of its stake to profit-making public sector companies or to their consortium. Even private sector companies are considered for the job. Soon after the Cabinet clearance, the ministry will call bids from interested entities. While the government prefers stake sale, it would also consider capital infusion into the company by enlarging its equity base.
?The interested investor could make an upfront payment to the government and decide on subsequent revenue-sharing. We also have to decide on how the new partner can manage (leverage) the vast land holdings and other utilities of the fertiliser units,? a ministry official told FE.
FCI has suspended operations in its four units at Gorakhpur, Ramagundam, Talcher, and Sindri and has given voluntary retirement to employees. The Delhi High Court has given time to the Central for preparing a viable plan to salvage the company. HFCIL too has suspended operations but the government and the company have started some efforts to revive the company. Some work has already been done at its Barauni plant in this regard. The government had earlier decided in principle to waive off the loans it has given to both the companies as well as the interest but a final call is yet to be taken to finalise the revival package.
Since FCI is into nitrogen fertiliser, which has not been deregulated, the possible interest from private investors may be muted. The ministry, however, is exploring all possibilities of creating new revenue streams for the plants by leveraging their assets including land holdings. In the case of HFCIL?s Barauni plant, the company has been able to tie up with natural gas marketing giant GAIL which would enhance its fuel efficiency.