Sale Of 51% In Nfl Cleared

The Cabinet Committee on Disinvestment yesterday approved the sale of 51 per cent government equity in National Fertilisers Ltd (NFL) to a strategic buyer, who will also be given management control.

An official spokesperson said the committee also approved the appointment of a global advisor/merchant banker for the sale through global bidding.

The advisor will be selected by a panel consisting of the secretaries of the disinvestment, legal affairs, public enterprises and economic affairs departments, besides NFL's chief executive officer and director (finance).

The proceeds from the disinvestment will be used as budgetary support to revive sick fertiliser units in the public sector.

 

The disinvestment is to be completed by December 31.

The government currently holds 97.6 per cent in NFL and financial institutions hold 2.3 per cent, while the employees hold 0.1 per cent.

The erstwhile Disinvestment Commission had classified NFL as belonging to the non-core sector. It had recommended that the government sell at least 51 per cent to a strategic buyer and transfer management control.

NFL was incorporated on August 23, 1974, for setting up two nitrogenous fertiliser plants, one at Bhatinda and the other at Panipat. Following reorganisation of Fertiliser Corporation of India, a unit at Nangal was assigned to NFL from April 1, 1978.

NFL recorded a turnover of Rs 2,643.24 crore in 1998-99 and posted a profit after tax of Rs 41.15 crore. It has authorised capital of Rs 500 crore and paid-up capital of Rs 490.58 crore.

It passed through a bad patch in 1995 when the `urea scam' came to light. It had placed an order for two lakh tonnes of urea with a Turkish firm Karsan and paid the entire amount of Rs 133 crore in advance. The urea never reached Indian shores.