FACT Shares Surge Ahead on Land Sale, Loan Waiver Hopes | CORPORATE ETHOS

FACT Shares Surge Ahead on Land Sale, Loan Waiver Hopes

By: | March 9, 2018
FACT

Mar 9: The shares of public sector Fertilizers and Chemicals Travancore Ltd (FACT, BSE: 590024, NSE: FACT) continues to rise hitting the 5% upper circuit in the past few days but there has been no sellers in this counter in recent trading sessions.
Analysts said that only 10% of the shares were with public and 90% still owned by the promoters themselves and hence the lack of sellers. After a recent low of 45 on 22 February, the scrip is rebounding and hitting the 5% circuit in the past few days. The scrip is up 5% at Rs 57.20 in BSE as against previous close of Rs 54.50.

However, there has been no major development in the company apart from the on-going talks about sale of 650 acres of land to Kerala Government and waiver of Rs 1000 cr loan availed from the centre.

Senior officials in FACT said that no new development regarding these two issues have taken place and hence were in the dark about the rising share prices. The proposal for sale has to be forwarded by the Ministry of Petroleum and Chemicals and approved by the Union Cabinet. As per the MoU signed with the Kerala Government in December, 170 acres will be bought by BPCL and rest by the Kerala Government for setting up petrochemicals and pharma parks under the Kinfra and KSIDC.

The Union Government had advanced Rs 1000 cr at a rate of 13.5% annually to tide over the financial crisis of the company. If ever the land sale takes place, bulk of the amount may go for repayment of the loan and also capital gains tax on the sale. Hence, the company may gain only Rs 350 crore which is insufficient for the developmental activities, a senior official said.

The Rs 1000 cr loan enabled the company to attain record production of ammonium sulphate and sulphuric acid In October. It produced 22,174 tons of ammonium sulphate, the highest ever. Sulphuric acid production rose to a record of 26,800 tons.

The financial performance in Q3FY 18 declined with net loss of Rs 4.41 cr while in September quarter the net profit was Rs 2.79 cr. Sales fell from Rs 605.32 cr to Rs 583.20 cr.