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Govt sells Paradeep Phosphates for Rs 1.52 bn

The government on Thursday decided to sell its 74 per cent stake in Paradeep Phosphates Limited to Zuari Chambal-OCF combine for Rs 1.52 billion.

This was stated by Divestment Minister Arun Shourie after a meeting of the Cabinet Committee on Divestent held under the chairmanship of Prime Minister Atal Behari Vajpayee.

Zauri group was the sole bidder for majority stake in the loss making fertiliser unit after other contenders Tata Chemicals, Oswal group and Rashtriya Fertiliser dropped out of the race prior to financial bids.

The government had mandated Deolitte Touche Tohmatsu as global advisors for the sale.

As per the available information PPL had a networth of only about Rs 11 million as on March 2001 against the paid up capital of Rs 4.33 billion and going by the projected losses of Rs 1.20 billion for the current fiscal the corporation would have a negative networth of about Rs 1.19 billion by March 2002.

Under the restructuring package, third since 1994-95, out of the government's loan of Rs 2.83 billion, as much as Rs 850 million loan was converted into equity besides the conversion of Rs 1.18 billion of preference capital into equity as part of efforts to reflect some semblance of positive net worth.

In the two earlier restructuring, the government had written off about Rs 2.80 billion of interest on loans as the corporation had failed to repay anything to the government since its birth.

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