FACT shares hit upper circuit on divestment news

After a series of bad news on the divestment front, a small bit of good news on FACT disinvestment was enough to send punters on the overdri...

After a series of bad news on the divestment front, a small bit of good news on FACT disinvestment was enough to send punters on the overdrive. FACT got the veritable boost from the government move inviting initial bids for its 51 per cent stake.

The scrip of the state-run fertiliser company was locked at the 20 per cent upper deck at Rs 28.50. By then, it had recovered from its intra-day low of Rs 23.60. “The rise in FACT has been spurred by inviting expressions of interest from bidders for its 51 per cent stake in the company,” said a dealer.

Consultant to the disinvestment Deloitte Touche Tohmatsu has fixed December 4, as the deadline for submitting applications.

The Centre has set a net worth criteria of at least Rs 200 crore and annual sales of Rs 600 crore during the last fiscal for eligibility for participation in the disinvestment process of FACT. It is believed that companies like Zuari Agro, Indo Gulf Fertilizers, Nagarjuna Fertilisers and Oswal are interested in bidding for FACT.

Story continues below this ad

In June 2002, the Cabinet Committee on Disinvestment had approved disinvestment of the government’s 51 per cent equity stake in the Kerala-based loss-making company. The employees of FACT are to be offered 2 per cent of the government’s stake at one-third the market price or the strategic sale price, whichever is lower, subject to the minimum par value.

FACT is the country’s oldest fertiliser plant and produces urea, ammonium sulphate, soda ash, nitric acid and sulphuric acid. Launched in the 1940s as a single-product fertiliser giant near Kochi, its second quarter losses up at Rs 55.8 crore from a net loss of Rs 50.72 crore in the corresponding period last year. Sales dropped by 33.6% to Rs 268.91 crore from Rs 405.16 crore.