Nod for closure of Rudraram HFL

Cabinet Committee on Economic Affairs takes the call

A meeting of Cabinet Committee on Economic Affairs, presided by Prime Minister Narendra Modi, on Wednesday approved closure of Hindustan Fluorocarbons Limited (HFL), a 500 tonne per annum Central public sector enterprise involved in manufacture of poly tetra flouro ethylene (PTFE) at Rudraram, which is 10 kms from Patancheru, on Hyderabad outskirts.

The announcement of the approval was made by Union Minister Prakash Jawadekar after the meeting in New Delhi.

The company, a subsidiary of Hindustan Organic Chemicals (HOC), was declared sick by the Board for Industrial and Financial Reconstruction (BIFR) after it started making losses since 2013-14 and had negative net worth of ₹ 43.20 crore. It had accumulated losses of ₹ 62.81 crore as on March 31, 2019.

The company manufactured plastics, synthetic resins, synthetic rubber and synthetic fibres of all kinds. It also manufactured PTFE bushes for fans to eliminate greasing and used by Khaitan and Kedia in their fans. The PTFE know how was available to select few companies in the world and HFL sourced it from Atochem, France, a world leader in fluorocarbons and fluoropolymers.

US-based chemical giant DuPont was earlier in talks with HOC to pick up a stake in company which was also approved by government in principle. The merger of the company with HOC, which was planned in order to bring HFL out of the purview of BIFR., was proposed to be dropped in case the joint venture with DuPont came through.

The Cabinet committee decision entailed shutting down operations of the company and offering voluntary retirement and voluntary separation schemes (VRS/VSS) to employees. The government will extend an interest free loan of ₹ 77.20 crore to the company exclusively for implementation of VRS and VSS. The amount will be repaid to government by disposal of land and other assets of the company. The surplus proceeds from sale of land and assets will be used for repayment of outstanding government loans of ₹ 15.80 crore with interest up to March 31, 2019.

The government approved appointment of NBCC (India) Ltd as Land Management Agency for facilitating disposal of HFL’s land assets subject to outcome of the decision of Telangana government and Telangana State Industrial Infrastructure Corporation on purchase of land.

The company, listed with Bombay Stock Exchange, had informed the exchange in March last last year that the ongoing process of strategic disinvestment by the Centre had terminated. The Centre asked it to initiate action to sell 66 acres and 13 guntas of vacant surplus land and use the proceeds to give VRS/VSS to employees.

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Printable version | Jul 7, 2020 12:59:48 PM |

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