Lok Sabha Question No. 1134 (UNSTARRED), answered on 2016-11-22
Subject: Status of PSUs
Ministry: CHEMICALS AND FERTILIZERS
Asked by: C.S. PUTTARAJU

## GOVERNMENT OF INDIA

## MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 1134 TO BE ANSWERED ON: 22.11.2016

## Status of PSUs

## 1134   SHRI C.S. PUTTA RAJU:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether  all  the  public  sector  undertakings  under  the  Ministry  are  making profits;
- (b) if not, the details of the profit making and loss making PSUs; and
- (c) the steps taken/being taken for revival of loss making PSUs

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS, SHIPPING, ROAD TRANSPORT & HIGHWAYS

(SHRI MANSUKH L. MANDAVIYA)

- (a) & (b):   No, Madam. Details of Profit making and Loss Making PSUs under the Ministry are as under:

| S. No.                    | Name of the Public Sector Undertaking Department wise                  | Status (Profit/Loss) as on 31.03.2016   |
|---------------------------|------------------------------------------------------------------------|-----------------------------------------|
| Department of Fertilizers | Department of Fertilizers                                              | Department of Fertilizers               |
| 1                         | Brahmaputra Valley Fertilizer corporation Limited (BVFCL)              | Profit                                  |
| 2                         | The Fertilizers And Chemicals Travancore Limited (FACT)                | Loss                                    |
| 3                         | FCI Aravali Gypsum and Minerals India Limited (FAGMIL)                 | Profit                                  |
| 4                         | Fertilizer Corporation of India Limited (FCIL) (All units are closed)  | Profit                                  |
| 5                         | Hindustan Fertilizer Corporation Limited (HFCL) (All units are closed) | Profit                                  |
| 6                         | Madras Fertilizers Limited (MFL)                                       | Loss                                    |
| 7                         | National Fertilizers Limited (NFL)                                     | Profit                                  |
| 8                         | Projects & Development India Limited (PDIL)                            | Loss                                    |
| 9                         | Rashtriya Chemicals & Fertilizers (RCF)                                | Profit                                  |

| Department of Chemicals & Petrochemicals   | Department of Chemicals & Petrochemicals                | Department of Chemicals & Petrochemicals   |
|--------------------------------------------|---------------------------------------------------------|--------------------------------------------|
| 10                                         | Hindustan Fluorocarbons Ltd. (HFL)                      | Loss                                       |
| 11                                         | Hindustan Organic Chemicals Ltd.(HOCL)                  | Loss                                       |
| 12                                         | Hindustan Insecticides Ltd(HIL)                         | Profit                                     |
| 13                                         | Brahmaputra Cracker & Polymer Ltd (BCPL)                | Loss                                       |
| Department of Pharmaceuticals              | Department of Pharmaceuticals                           | Department of Pharmaceuticals              |
| 14                                         | Karnataka Antibiotics & Pharmaceuticals Limited (KAPL). | Profit                                     |
| 15                                         | Rajasthan Drugs & Pharmaceuticals Limited (RDPL).       | Loss                                       |
| 16                                         | Hindustan Antibiotics Limited (HAL).                    | Loss                                       |
| 17                                         | Bengal Chemicals & Pharmaceuticals Limited (BCPL).      | Loss                                       |
| 18                                         | Indian Drugs & Pharmaceuticals Limited (IDPL)           | Loss                                       |

(c): Following steps have been taken for the revival of loss making PSUs:

## 1. Fertilizers And Chemicals Travancore Limited(FACT)

Government of India has sanctioned a Plan loan amounting Rs 1000 Cr to FACT on 21.03.2016 to meet he current financial crunch. In addition to this,  Department of Fertilizers has asked FACT to formulate a comprehensive financial/ business plan which inter-alia including monetization of surplus land of FACT & waiver of GoI loans/conversion of GoI loans into interest free loan etc.

## 2. Madras Fertilizers Limited (MFL)

A  proposal  for  the  financial  restructuring  of  MFL  had  been  pending  for  the recommendation of the BRPSE for a long time. In the meantime, Government wound up the BRPSE and DPE issued guidelines for stream lining the mechanism for the revival and restructuring of sick/incipient sick and weak CPSE. Accordingly, MFL was asked to engage an external expert agency for exploring the possibility for the revival of MFL in terms  of  these  guidelines.  MFL  has  engaged  Projects&  Development  India  Limited (PDIL) as expert agency on 02.06.2016 to explore possibility for its revival.

## 3. Projects & Development India Ltd (PDIL)

Based  on  recommendations  of  the  NITI  Aayog,  the  Cabinet  Committee  on Economic Affairs (CCEA) in its meeting held on 27.10.2016 has inter-alia approved for the disinvestment of 100 % shareholding of Government of India in PDIL to strategic buyer  identified  through  two-stage  auction  process.  Therefore,  Government  is  not considering any proposal for the revival of PDIL.

## 4. Hindustan Fluorocarbons Ltd (HFL)

(i) A  rehabilitation  package  for  HFL  was  approved  by  BIFR  on  03.12.2007  at  a total  cost  of  Rs.19.28  crore  comprising  of  Capital  Expenditure  (Rs.8.99  crore),  One Time Settlement (OTS) of banks & financial institutions (Rs.4.67 crore), VRS payment (Rs.4.00 crore) and Working capital (Rs.1.62 crore).

(ii) For revival and growth of HFL, the company is diversifying into making products which can be sold in niche market with more margins as compared to PTFE (Poly Tetra Fluoro  Ethylene).  Therefore,  company  is  focusing  on  development  of  fluoro  specialty chemicals,  wherein  contribution  is  more  as  compared  to  PTFE,  and  has  already developed TFE-ETHER, Telomeres etc. HFL has also developed advanced grades of PTFE i.e. Modified PTFE (MPTFE), which has higher margins than ordinary PTFE.

(iii)   Plan loan of Rs.16.80 crore was provided by the Govt. to HFL in 2014-15 for plant refurbishment schemes & new initiatives and for development of modified PTFE.

(iv) The Govt. on 27.10.2016 has given 'in principle' approval for strategic disinvestment of HFL with the parent company (HOCL) to exit the firm completely.

## 5. Hindustan Organic Chemicals Ltd (HOCL)

(i)   In 2001, the Govt. of India provided guarantee for Rs.100 crore for raising resources from the capital market.

(ii)    Following rehabilitation package was approved for the company in March, 2006:

- (a) Fund infusion of Rs.250 crore (preferential shares)
- (b) Non-cash transaction - Continuation of the Govt. guarantee for Rs.100 crore (given in 2001) for 10 years and waiver of interest and penal interest

(iii)        In  February,  2007,  the  Govt.  approved  investment  of  Rs.20  crore  (preference shares) for restarting the Caustic Soda plant at Rasayani unit of the company.

(iv)   The Govt. on 01.08.2013 approved the following revision of terms and conditions of the rehabilitation package of 2006:

(a) Postponement of the redemption of Rs.270 crore preference shares, that was due for redemption from 2011-12 onwards, to 2015-16 onwards

(b)  Extension  of  Govt.  guarantee  of  Rs.100  crore  for  5  more  years  i.e.  up  to 28.08.2017

- (v)     In July, 2014, Govt. further gave guarantee for Rs.150 crore for issue of bonds by the company for meeting the working capital requirement, repayment for raw material suppliers, bank loans, employees' dues etc.

(vi)        In  September,  2015  and  September,  2016,  the  Govt.  paid  annual  interest  of Rs.10.57  crore  on  the  Rs.100  crore  bonds  and  Rs.14.04  crore  on  the  Rs.150  crore bonds as the company failed to pay both the amounts due to lack of sufficient funds.

(vii) In view of the continuing losses of HOCL, a restructuring plan for the company is under consideration of the Government.

## 6. Brahmaputra Cracker & Polymer Ltd (BCPL)

As per the audited accounts of BCPL for the year 2015-16, the BCPL has made loss of Rs. 270.00 crores in 2015-16. This is due to the fact that the Plant is under stabilization and thus working at reduced/suboptimal capacity.  All efforts are being made to operate the plant to run at its rated capacity in due course of time in a progressive manner.

## 7. For all loss making PSUs under Department of Pharmaceuticals:

The  Government  is  considering  Comprehensive  steps  regarding  the  loss  making PSUs.

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