Government invites fresh bid for sale of 51% equity in FACT

Jays Jacob
06 February 2003

Kochi: The central government has invited fresh bids for the sale of 51-per cent equity in Fertilisers and Chemicals Travancore (FACT), setting a deadline of 26 February 2003 for prospective companies to submit their expression of interests (EoIs).

The revised bid is intended to allow fertiliser cooperatives of Indian Farmers Fertilisers Cooperatives (IFFCO) and Krishak Bharati Cooperative (Kribhco) to bid for the Kochi-based fertiliser public sector unit (PSU), say sources.

The Centre had, earlier, invited bids for FACT in November 2002 asking the interested companies to submit the bids by 4 December 2002. Deloitte Touche Tohmatsu India, the advisers of the central government in the FACT sell-off, has stipulated that the bidding companies should have a net worth of Rs 200 crore or above and sales of Rs 600 crore or above in the last year’s balance sheet.

The revised bid comes after the Centre announcing the dual pricing policy, whereby the subsidy is different for units using captive ammonia units and those using natural gas as feedstock. FACT uses costly naphtha as feedstock for its captive ammonia unit and will get higher subsidy for the next three years. Officials expect much better response from companies this time compared to the earlier EoI announcement, thanks to the subsidy incentive.

Aditya Birla Group company Indo Gulf Fertilisers and Deepak Fertilisers had bid for FACT during last time, say sources adding that they are likely to submit their EoIs this time, too.

With the Centre deciding not to relax the total sales turnover (Rs 600 crore) for those companies interested in FACT, it is very likely that both IFFCO and Kribhco may join hands to bid for the 51-per cent stake in FACT.