New Delhi, Sept. 10: The government’s bid to privatise state-run National Fertiliser Ltd (NFL) by offloading majority stake in favour of a strategic partner received a setback today when all the three bidders quoted prices that were below the government set reserve price.
The three bidders were Birla group promoted Zuari Chambal Fertilisers, Indo-Gulf Fertilisers and state supported Krishak Bharti Cooperative (Kribhco).
The government had decided to disinvest 51 per cent stake in the fertiliser major to a strategic partner along with management control. Rabo Bank has been appointed as the global advisor for the process. The government currently holds about 97 per cent stake in NFL, which employs close to 5000 people.
Sources in the company confirmed that none of the bids were above the reserve price. Further details on the bids were not immediately available.
Recently, Tata Chemicals had opted out of the race for NFL on grounds that the acquisition will not add significant value to the company’s existing operations. IFFCO had also withdrawn from the race.
National Fertiliser selloff process has been embroiled in controversy for the last few years with political parties opposing it. The government itself had decided to pussy foot on the selloff pleading that a fertiliser pricing policy would first be declared before the company is put up for sale.
Ultimately the cabinet decided to go ahead with the selloff process after the disinvestment ministry allowed state supported cooperatives to also join in the bidding process.
Currently, NFL is the second largest producer of urea producing 32.5 lakh tonnes, slightly lower than market leader Iffco’s 36.5 lakh tonnes.