Fertilizers and Chemicals Travancore (FACT), in the throes of a financial crisis, has got a breather in the form of Rs. 300 crore gathered from various sources, including more than Rs. 100 crore of arrears from the government.
Chairman and Managing Director of the public sector company Jaiveer Srivastava had said at the end of April that the company’s operations would be halted if help did not come within seven days. However, between then and now, the company has been able to raise approximately Rs. 300 crore, FACT sources said.
With the prospects of a good monsoon, FACT, the key seller of fertilizers in South Indian States, has also been able to raise Rs. 80 crore in sales advance. The company has also realised Rs. 60 crore in sale proceeds, giving it a financial cushion for the time being. However, the long-term prospects for the company look bleak unless the new Union government acts quickly to give it a financial lifeline. FACT workers have been on the warpath demanding that the government sanction a Rs. 991-crore package recommended by the Board for Reconstruction of Public Sector Enterprises. However, the pressure tactics failed to make the outgoing UPA II government act in favour of the company.
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The BRPSE-recommended package included a component of interest-free loan of Rs. 300 crore, repayable over the next 10 years with a moratorium period of two years. A waiver of government of India loans of about Rs. 283 crore and the approval of a write-off of Rs. 159 crore in interests up to the end of March 2013.
FACT’s future also will depend on allocation of natural gas and the price at which the fuel is supplied to the company, which now gets the fuel at $24.5 per mmBtu.