Kochi: With liquidity crisis worsening, Fertilisers and Chemical Travancore (FACT), Kerala’s largest public sector undertaking, is now pinning its hopes on the promise made by Union Finance Minister Arun Jaitley on a central aid package to keep it floating.
“The union ministers and secretaries for finance and fertilisers and chemicals departments met last week in New Delhi and discussed the central aid for FACT,” Mr Jaitley told representatives of the Save Fact Forum in Kochi on Thursday. “We shall consider it positively, and will take a decision in two weeks,” he said.
With its coffers empty to meet the working capital requirements, the company will be forced to shut down its operations in two weeks at a time when the import of fertilisers is going up and the central government is encouraging companies to ‘Make in India.’
“The company has already closed the ammonia plant after it defaulted payment for the purchase of LNG,” said Mr George Thomas of the Save Fact Forum.
“It will have to close the entire operations once key raw materials are exhausted.” FACT has not been able to operate the caprolactum plant even as India keeps importing it, he pointed put.
With the central package of Rs 991 crore promised three years back showing no signs of materialising, the company had resorted to heavy borrowing landing itself in a debt trap.
“We paid Rs 200 crore as interest alone last year, which is unsustainable,” said FACT sources. The promised central package comprises the waiver of loans and other liabilities of Rs 551 crore and a soft loan of Rs 400 crore to meet the working capital requirements.
