After the recent successes in the restructuring of steel companies, it is now the turn of fertilizer companies to undergo corporate debt restructuring (CDR).
The cases of Nagarjuna Fertilizers and Chemicals and Gujarat State Fertilizers & Chemicals, which between them have raised funds via debentures aggregating Rs 2,800 crore, are to shortly come up for the consideration of the CDR cell.
These companies have suffered a severe financial impact on account of the introduction of new parameters pertaining to the retention price for urea with retrospective effect in relation to the seventh and eight pricing periods commencing from July 1, 1997 and April 1, 2000, respectively. The new parameters were announced by the Centre in June 2002. This lead to huge recoveries of past subsidies.
NFCL sustained a loss of Rs 127.47 crore in the year-ended March 31, 2003 as against a net profit of Rs 9.70 crore in the preceding financial year.
GSFC also reeled under a net loss of Rs 390.84 crore in FY 2002-03 as against a net loss of Rs 48.06 crore in FY 2001-02.
Hyderabad-based NFCL has taken term/ working capital loans and raised funds via debentures amounting to about Rs 1700 crore from banks and financial institutions.
The Vadodara-based GSFC has taken term/ working capital loans and raised funds via debentures amounting to about Rs 1100 crore from banks and financial institutions.
