Nafed in talks with NBCC to sell assets for repaying debts

Nafed undertakes procurement of agri-commodities at support price on behalf of government

Agri-cooperative Nafed has put on the block its properties, including the head office, for part repayment of massive Rs 2,000 crore debt and is in talks with state-owned NBCC for the sale, a top official said.

Nafed has started the process of getting the properties valued.

"We are in the advance stage of talks with National Buildings Construction Corporation for takeover of all immovable properties as the last effort to pay debt to banks," Nafed Managing Director Sanjeev Chopra told PTI.

He added however that the sale would be subject to the approval from banks, which have already moved a recovery suit against the cooperative for unpaid dues.

While NBCC develops and executes real estate projects in India and abroad, Nafed undertakes procurement of agri- commodities at support price on behalf of the government.

National Agricultural Cooperative Marketing Federation owes around Rs 2,000 crore to banks and has negative networth of Rs 147 crore.

Nafed is running huge losses because of high interest costs. It had invested nearly Rs 4,000 crore in joint venture businesses for undertaking export-import operations through loans from commercial banks during 2003-06.

It could not recover a large part those investments.

Chopra said: "Nafed has offered to sell its head office in Delhi and other properties spread across the country. But the sale of these properties would be subject to banks agreeing for the out-of-court settlement with Nafed."

The cooperative is in the process of taking all banks on board to proceed with this plan, he added.

Nafed owes debt to eight lenders including Punjab National Bank, Oriental Bank, South Indian Bank, Syndicate Bank and Central Bank.

Nafed has a number of properties in cities such as Delhi, Kolkata, Mumbai, Chennai, Pune, Nashik and Jaipur.

According to sources, Nafed plans to shift to a rented premise after the sale of its head office located in south Delhi. It proposes to continue operations with fewer employees in order to bring down administrative expenses from Rs 56 crore to Rs 30 crore.

The Nafed move to sell off properties comes within a couple of weeks after announcing 10 per cent cut in the salary of its 500-odd employees and offering voluntary retirement scheme.

Earlier, Nafed had approached the Agriculture Ministry seeking a bail-out package of over Rs 1,000 crore but the proposal was rejected.