Divestment panel for govt selling 74% in Brahmaputra Valley Fert

NEW DELHI: The Disinvestment Commission has recommended that the government divest up to 74% of its equity in the newly-formed Brahmaputra Valley Fertiliser Corporation (BVFCL) to a strategic partner, through competitive bidding.
The recommendation comes after the government sank Rs 509.4 crore only early last year to revamp the company’s Namrup units. The Commission has recommended that the government should retain at least 26% of the stake for a period of three years, after which this balance equity should also be sold. Nor has it ruled out the closure option, a decision on which, it has suggested, should be taken based on the response from prospective bidders and the highest bid price offered. “In the absence of proper interest from bidders, closure/winding up of the company should be pursued,� the report on BVFCL said.
The position of the plants in the sensitive north eastern region is cited as one of the reasons why the route of disinvestment to a strategic partner should be explored first before examining the closure option.
The company incurred a loss of around Rs 50 crore in the first year of operation. B Bodeiah, who recently took over as MD of the company, told ET that the delay in the completion of the revamp schedule was primarily because Namrup II is yet to be commissioned and the overhead expenditure of Rs 18 crore which has to be borne by the new company. The revamp schedule for the unit has been delayed from the original February ’02 deadline to February ’04, when commercial production from Namrup II is now expected to start. Namrup III is also expected to be operational in this financial year.