Fertilizers and Chemicals Travancore Ltd matter may handicap share sale

KOCHI: The Union government may find it difficult to raise any substantial amount from the strategic sale of the 51 per cent share of the ailing public sector fertilizer maker Fertilizers and Chemicals Travancore Ltd (FACT) in view of the negative book value of the company and its poor financial situation. The company has a negative book value of Rs 20.23. Book value is estimated based on difference between the total assets and liabilities of a company.

The government has the option of going in for the sale after cleaning the books of the company which has an accumulated loss of Rs 1,954 crore apart from a loan liability of Rs 1,850 crore. The Niti Aayog has recommended strategic sale after cleansing the account books of the company. “If the Central government is ready to spend so much money that alone would resolve the financial problems of the company,” a company source said.

The Union government holds 98.6 per cent of the equity in the company. At the NSE the FACT share closed at Rs 24.75 on Thursday. Trade unions in FACT meanwhile are planning a massive agitation against the move for the strategic sale. A meeting of the trade unions and political parties will be held in Ernakulam on June 20 as part of formulating a long term plan to resist the sale.

“The Niti Aayog recommendation amounts to privatisation,” said George Thomas, spokesperson of Save FACT Forum, an apex body of trade unions and political parties. Sources said efforts are also on to bring a unanimous resolution in the State Assembly opposing the decision of the sale. The union leaders are also planning to meet Chief Minister Pinarayi Vijayan for seeking support of the state government in the struggle.