The Hindu : Business : Ministry asks FACT to present revival plan

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Saturday, Jul 16, 2005

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Ministry asks FACT to present revival plan

Special Correspondent

Rashtriya Chemicals directors on FACT board suggested

NEW DELHI: In a bid to revive the loss-making Fertilisers and Chemicals Travancore Limited (FACT), the Chemicals and Fertilisers Ministry has asked the company's new Chairman, G. C. Gopala Pillai, to make a presentation on the restructuring plan to the Board for Reconstruction of Public Sector Enterprises (BRPSE) within the next two weeks.

According to official sources, it has proposed that some directors be brought on the FACT board from profit-making companies like Rashtriya Chemicals and Fertilizers (RCF) to utilise their expertise in bringing about a turnaround. The sources say that earlier it had been proposed that FACT could be taken over by RCF. Subsequently, the Ministry felt that this would not be possible since the concept of a holding company with subsidiaries had been done away within the fertilizer sector for quite some time.

The prospect of giving FACT under a management contract to RCF was also suggested then by the BRPSE since the issue had been posed for its consideration.

However, with the induction of a new Chairman at the helm of FACT earlier this month, the Fertilizers Ministry felt it should be possible to bring about a revival of the company without seeking RCF assistance. Instead, it has suggested some directors from RCF can be brought on the board of FACT.

In addition, the existing RCF Chairman, S. Balan, who had additional charge of FACT till recently, could be asked to provide technical assistance on a consultancy basis. Mr. Balan is retiring at the end of this month, the sources say.

FACT now has accumulated losses amounting to over Rs. 300 crore as well as substantial liabilities to the Government. The new revival package envisages fresh capital outlay to ensure that the plant is able to achieve operational profits in the medium term, the sources say.

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