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Last Updated : Dec 24, 2012 03:34 PM IST | Source: CNBC-TV18

Expect 12.5% divestment in RCF by Q4 FY13 via OFS: CMD

RG Rajan, CMD, Rashtriya Chemicals and Fertilisers (RCF), says that he expects disinvestment in the company to happen in the last quarter of this financial year and via OFS. We are still waiting for final communication from the government.

 
 
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RG Rajan, CMD, Rashtriya Chemicals and Fertilisers (RCF), says that he expects disinvestment in the company to happen in the last quarter of this financial year and via OFS. We are still waiting for final communication from the government.


Also read: No system to check price reasonability of fertilizer: Govt


Below is the edited transcript of his interview to CNBC-TV18.


Q: There were expectations that over the weekend the Union Cabinet would decide on whether or not to divest 12.5 percent stake in your company. Has any final decision been reached and communicated to you in terms of how soon it will be done and what instrument will be used?


A: I think disinvestment will be done in the last quarter of this financial year and via OFS. We are still waiting for final communication from the government.


Q: What would be the size of the OFS?


A: It would be 12.5 percent of the equity.


Q: Are you planning to raise capital as well as the government goes ahead and sells its stake, do you have any plans of making any offerings?


A: No, we have no plans of making any offerings.


Q: Now, as the new fertilizer policy is on track what is the existing capacity that you have and what is the new capacity that is lined up which is contingent on the new policy?


A: Our current capacity is 2.3 million tonnes for urea and 0.7 million tonnes for NPK at our two plants. We have lined up an investment proposal at Thal for 1.3 million costing around Rs 4100 crore. This project is on the advanced stages and we hope that the zero date will be in the first quarter of the next financial year.


Q: Whether any indicative pricing has been worked out for the OFS that you intend to do in the last quarter?


A: The price issue will be decided in January or February.


Q: Gas availability has been a big issue for fertilizer companies, not so much the policy itself. Did you get any clarity from the government?


A: Yes, right now there is clarity on this subject. We are in talks with GAIL India and they are importing LNG from the US, Canada and other sources and we will get gas at a very competitive rate.


Q: What is the demand for gas from existing urea plants and what could the incremental demand be due to expansion, revival of closed units etc once the new policy comes through?


A: Current demand is around 46 mmcmd and around similar amount will be required for the revival, expansion, revamps and for new plants.


Q: How have sales been? We understand it has been a much more flat performance, there is a bit of an inventory situation that’s been building because of the way the monsoon panned out. For sales what's the experience been for RCF?


A: Due to poor off take the inventory levels is rising because of monsoon. The industry saw a 20 percent dip in the sale of fertilizers and going forward also sales will be slim and is a cause of concern.


Q: What do you think you may have ended this quarter up with in terms of pure sales?

A: RCF is mostly a urea player with some phosphatic and potassic (P&K) and nitrogen (N), P and K fertilizers. This year we have imported less urea for marketing. So overall 15 percent year to year basis there will be decrease in the total sale of fertilizers.

First Published on Dec 24, 2012 10:48 am
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