KOCHI: In a major development on the revival of Fertilisers and Chemicals Travancore Ltd (FACT), the company is all set to use its land at Ambalamugal to pay off a loan worth `1,000 crore taken at 13.5 per cent interest rate.
FACT is hopeful to conclude a deal (lease/sale) that will involve making the most of 600 acres by the end of 2017. On a rough estimate, the amount that can be mobilised is around `2,100 to `3,000 crore, which is more than enough to pay the loan back and to set up new plants. The plan is to give 450 acres to BPCL Kochi Refinery and 150 acres to the state government.
“The company needs to get approval to sell/rent out its land. We have met Chief Minister Pinarayi Vijayan to discuss this,” A B Khare, CMD, FACT told Express. After this, the company will approach the Union Finance Ministry and Central Government to get their nod.
“They must approve of the rate of the land too. We are hopeful to conclude the deal in 2017-18, hopefully before the end of calendar year 2017,” he said. FACT has around 2,280 acres at Ambalamugal, Udyogamandal and Palluruthy. At Ambalamugal, the company has 1,572 acres, including a potable water pond. The company has free-holding on this land.
The cumulative liability on FACT as of last financial year stands at `836 crore, excluding the `1,000 crore loan from the Centre. Finance Minister Thomas Isaac had said recently the state government was planning to set up the Petrochemical and Pharma Parks in Kochi by acquiring land owned by FACT.
The move by the company to lease out Ambalamedu House, a 50-room guesthouse it owns at Ambalamugal, has run a ground as it did not receive “attractive offers.”
The idea was to lease out the guesthouse and the 30-acre island to run a hotel on it. The Save FACT Action Committee has expressed scepticism over the company’s move to “leverage” the Ambalamugal land.
“The Central Government should make the company debt free either by writing off the accumulated debt or by equity conversion,” said George Thomas, publicity convener, Save FACT Action Committee.
“The 13.5 per cent interest charged on the Centre’s loan of `1,000 crore should be waived.”
George said joint ventures can be set up in collaboration with public sector companies on FACT land.
“But the value of the land should be determined by the prevailing market prices and not by the district-level purchase committee, as it often quotes lower rates. The money left over after paying the debt has to be utilised for expansion of plants,” he said.