Govt approves restructuring of SFCI

NEW DELHI: The government on Thursday approved restructuring of public sector seed company State Farms Corporation of India Ltd (SFCI) by converting its outstanding loan and interest of Rs 124.42 crore to government equity.

Briefing reporters after the Cabinet meeting, Information and Broadcasting Minister P R Dasmunsi said the restructuring of SFCI includes conversion into equity of Rs 58.74 crore loans and Rs 65.68 crore interest as on March 31, 2007.

He said the government also decided to set off SFCI's accumulated losses of Rs 17.12 crore against the equity capital of the company. The Centre also decided to grant Rs 21.21 crore to SFCI to enable the company pay the provident fund liabilities, the minister said.

The government said SFCI could not achieve the seed production targets due to various factors and suffered losses while the fixed costs of the company increased.

The factors which contributed to losses included non-availability of sufficient irrigation facilities, lack of farm equipment, labour unrest, managerial inefficiency, locational disadvantages and operational problems.

The accumulated losses of SFCI as on March 31, 2007 stood at Rs 117.42 crore, which were more than the paid up capital of Rs 24.19 crore and capital reserves of Rs 46.22 crore.