Project Lotus Wilts After 13 Yrs
When the Arvind Mafatlal group acquired the Letter of Intent for expanding its petrochemicals business in 1985, they hardly knew it would take more than a decade for the project to get off the ground.
After cost overruns and numerous reconfigurations and aborted fund-raising attempts, the Mafatlals have finally thrown in the towel. Project Lotus has been handed over to the Royal\Dutch Shell group.
The Mafatlals yesterday agreed to transfer the petrochemicals business of Nocil to a new company in which Shell will hold 49 per cent and control management. The Mafatlals' stake will drop from 42 per cent to 21.5 per cent.
"This is the best we could have done under circumstances. If we had not signed the deal, we would have gone into liquidation," chairman Arvind Mafatlal told shareholders.
However, the future of Nocil's residual business and the group as a whole is still unclear. After hiving off the petrochemicals and rubber chemicals businesses, Nocil will have little left for itself. Plastic products and investments are hardly exciting businesses.
Most of the other group companies, excepting De-Nocil, the 50:50 joint venture with Dow Chemicals, are not doing well. The company is already shutting down its polyvinyl chloride business.
Mafatlal said the Nocil restr- ucturing will help the group focus on textiles.