India’s MFL appoints turnaround consultant

26 June 2008 17:10  [Source: ICIS news]

NEW DELHI (ICIS news)--Indian loss-incurring public enterprise Madras Fertilizers Limited (MFL) said on Thursday it has hired Deloitte Touche Tohmatsu India (P) Ltd to prepare its turnaround plan.

The company said it would submit a financial restructuring package to the government after receipt of the recommendations from the consultant.

An industry source said the action was caused by inability of Department of Fertilisers to convince other government departments to agree to a turnaround package recommended by Board for Reconstruction of Public Sector Enterprises (BRPSE) in 2006.

Subsequently, MFL had asked the government to approve a revised survival package including the waiver of government loans and interest aggregating to Indian Rupees Rs3.48bn ($80m). The restructuring proposal prepared by the company also mooted retrospective changes in urea and nitrogen phosphorus potassium (NPK) pricing framework to secure additional subsidy of Rs1.71bn.

MFL has been incurring losses for several years that led to complete erosion of its net worth (equity plus reserves) by 31 March 2004. MFL’s accumulated losses as on 30 June 2007 aggregated to Rs5.71bn.

($1 = Rs42.75)

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By: Naresh Minocha
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