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FACT sale flagged off amid calls of defiance

New Delhi, Nov. 8: The government today invited preliminary bids to sell a 51 per cent stake in Fertilisers And Chemicals Travancore Ltd (FACT) even as rumblings of discontent over selloff grew louder.

The move is seen less as a bold push to the flagging privatisation drive, and more as a cautious attempt at testing waters after the sale of Nalco ran into rough weather.

The tender for stake sale calls for bids by December 4. The government, which owns about 98 per cent of the Kerala-based firm, wants to induct a strategic partner.

Deloitte Touche Tohmatsu India Private is advising the Centre on the sale of the PSU, which made a profit of Rs 57 lakh in the previous financial year, but slipped to a Rs 55.8-crore loss in the second quarter of this year.

That foes of selloff in the Cabinet have not sheathed swords was evident from senior fertiliser ministry officials who insisted that FACT could not bartered away until the long-delayed fertiliser policy is drawn up. “The sale offer is to test waters. The Cabinet has agreed that no fertiliser PSU can be sold till the policy is ready.”

Earlier, the sale of National Fertilisers Limited (NFL) could not go through in the face of resistance from Akali Dal, a partner in the BJP-led coalition government which opposed the process on the ground that the fertiliser policy, to be framed by minister S. S. Dhindsa, had not been finalised. Ministry officials are now using the same ruse to stonewall the sale of the FACT.

Curiously, the decision not to sell NFL was taken around the time disinvestment in BPCL and HPCL was put off by three months. The setbacks were then seen as a major victory for the anti-disinvestment lobby.

Undeterred, the department of disinvestment tried to hawk Nalco amid opposition from mines minister Uma Bharti and Orissa chief minister Naveen Patnaik. It was halted in its tracks when company workers supported by local politicians roughed up a Hindalco team that went to the plant for due diligence. The sale slid to the slow lane as global bidders refused to send teams unless the Centre guaranteed their safety.

Smarting from these blows, the disinvestment department decided to concentrate on PSUs that it thought could be sold with minimum of fuss.

However, even the sale of FACT, which the department judged would be relatively easier, appears in trouble, at least until the fertiliser policy is drawn up and debated by all.

Stock spurts

The government move to invite bids for FACT, sparked a rally in the counter on the stock exchanges today. The FACT scrip which opened at Rs 25 on the Bombay Stock Exchange today briefly dipped to Rs 23.50 but quickly recovered and was soon locked at the 20 per cent ceiling of Rs 28.50.

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