NEW DELHI: The promoters of Hindustan Urvarak and Rasayan Ltd (HURL), which comes under fertlizer ministry, are mulling to raise Rs 2,800 crore via equity infusion before submitting its proposal for disinvestment to the Department of Investment and Public Asset Monetization (DIPAM), a top government source told this newspaper.
The funds will be used to meet the additional expenditure required for the completion of the three projects at Sindri, Gorakhpur and Barauni. As per sources, there is a variation of about 32 per cent in total original cost of the project and in the present estimated cost. All three plants commenced their operation last year and are operating at 95-105 per cent capacity.
“Promoters will finance the cost overrun. The company’s board had recommended the cost overrun proposal in March-end. The board will likely approve it on April 6,” the official said.
“The board had recently reviewed the disinvestment proposal of HURL and it was suggested by the promoters that the disinvestment proposal of the company should be sent only after the equity infusion for cost overrun,” he further said.
“In the meantime, HURL is preparing a draft of a joint memo for submission to DIPAM,” he stated.
HURL was incorporated on June 15, 2016, as a joint venture company by Coal India (CIL), NTPC and Indian Oil Corporation (IOCL) as the lead promoters with Fertilizer Corporation of India (FCIL) and Hindustan Fertilizer Corporation Limited (HFCL) as other two partners.
The lead three promoters hold a total of 89 per cent equity share with equal partnership, while FCIL and HFCL together have the balance 11 per cent share against their usable assets, opportunity cost and use of land on a lease basis at the three plant locations.
The Ministry of Power and the Ministry of Coal have already granted their in-principle approval for the disinvestment. Meanwhile, boards of NTPC, IOC and CIL have also approved the proposal of privatisation.