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The combine of trade unions at the financially-troubled Fertilisers and Chemicals Travancore Limited has described the interim relief of Rs.1,000 crore as a unique case of Union government intervention.
“This is the first time that such a sanction has been made for a public sector company,” said a spokesman for Save FACT Action Committee, which has been demanding government intervention to turn around the fertilizer unit.
The spokesman thanked the Union Finance and Fertilizer Ministries and the top management of the company, including its managing director Jaiveer Srivastava, for the development.
“FACT can now breathe easy,” he said describing the infusion of funds as the first step towards the company becoming profitable. The current market conditions were in favour of FACT, he added.
The Lok Sabha approved the sanction of Rs.965 crore on Wednesday. The remaining Rs.35 crore Plan fund had already been allocated to FACT. The fresh infusion of funds would go to the Rajya Sabha and later to the President of India for approval, sources in the know of the developments said on Thursday.
A memorandum of understanding will be signed by the Union Ministries of Finance, and Fertilizers and Chemicals on the condition on which the money will be released. “It is learnt that the money will come with an interest of 7.5 per cent, the current rate on government securities,” sources said. They expect that FACT will get the money by the middle of January 2016.
They said that most immediately, the fund would be used to retire some of its outstanding debts, including those with raw material suppliers and banks. FACT owes roughly Rs.220 crore to Minerals and Metals Trading Corporation for LNG. The fertilizer company has also substantial outstandings with its banks. “Restarting caprolcatam and ammonia production are also on the list of issues to be addressed immediately by the company management,” sources added.
From: The Hindu