1.                  Paradeep Phosphates Limited (PPL) was incorporated in December 1981.

 

 

             Authorised capital as on 31.3.2001:           Rs.467.65 crores

            Paid up capital as on 31.3.2001:                Rs.432.65 crores

         (Including Restructuring now approved) (Rs.230+117.65+85 cr.)

           

Accumulated losses                                  Rs.431.50 crores

            as on 31^st March 2001

 

            Net worth as on 31.3.2001                           Rs.1.15 crores                      

            Estimated Loss in 2001-02                         Rs.120 crores approximately

            (Current Net worth already negative )

 

Manpower as on 30^th September 2001:

 

            Regular employees               :           1150   (Approximately)

 

            Contract Labour                    :           1600   (Approximately)

              

2.         Manufacturing capacity per annum  :          7.20 lakh tonnes DI-Ammonium

Phosphate (DAP)

2.25 lakh tonnes Phosphoric Acid

6.60 lakh tonnes Sulphuric Acid

 

3.         Total GOI loan (as on 31/3/01)                    -           Rs.283.76 crores

(will remain about Rs.200 crores even after present restructuring)

 

4.         Outstanding Liability on account of             -           Rs.856.34 crores

payment due to OCP of Morocco,

GCT  of Tunisia & to MMTC.

 

(The non-payment of dues of suppliers of Morocco & Tunisia have implications of relations of India with these countries.)

 

5.         `Key Financials for the last four years

 

Year	Sales (Rs. crores)	Net Profit (Rs. Crores)	Dividend Paid to GOI	Earning Per Share (Rs.)	Book Value Per Share
1997-1998	1171.35	(-) 105.52	NIL	Negative	Negative
1998-1999	1005.41	(-) 57.95	NIL	Negative	Negative
1999-2000	890.84	23.96*	NIL	109.42*	Negative
2000-2001 (provisional)	710.87	(-) 141.02	----	Negative	Negative

* This is on account of financial restructuring rather than performance.

 

6.         In the current year the Company is incurring losses @ Rs.10 – 12 crores every month.

 

7.         PPL has been a loss making Company and the Balance Sheet profits during 1993-94, 1994-95,1995-96 and 1999-00 are due to waiver of interest on GoI loans and interest holidays.

 

 

8.         PPL has not paid interest or principal amount due to Government on account of GoI loans since inception.

 

9.         The  High Court of  Orissa  in  a  Public Interest Litigation passed orders on 11^th January 2002 directed the Company to stop production after 15.2.2002 until the Company takes all steps for controlling pollution as per the directions of the Orissa State Pollution Control Board.

 

10.      There have been three financial restructuring( including the one approved recently) as under:  

 

 

 

11.       PPL was  referred  to  the  Disinvestment  Commission in July 1998. The Disinvestment Commission in its 10^th Report (June 1999) had classified PPL as non-core and recommended inter  alia  for strategic sale  of  not  less than 51%.  The  Cabinet  Committee on Disinvestment (CCD) on 18.11.2000 decided for disinvestment of 74% equity through strategic sale.

 

12.       Public  advertisement  was  released  on  27^th  March 2001 in the Economic Times, the Business Standard and the Financial Express inviting Expressions of Interest from prospective investors.  The  advertisement   was  also  issued  in  the Economist,  London.  In  addition,  the Advisors  had  sent  direct  mailers  to about 125 potential bidders.  The last date for conveying Expression of Interest was 15^th May 2001.

 

13.       M/s  Tata  Chemicals Limited, M/s Zuari Industries Limited, M/s   Rashtriya  Chemicals  & Fertilizers Limited and M/s Oswal Fertilizers & Chemicals   Limited   lodged   their Expression of Interest.  All the  4 were  found   qualified  to  participate.  All    the 4  parties  completed their due diligence including visits to the Plant.  Based on the frozen transaction documents, technical and financial bided  attended  the  bid  submission event.  M/s Tata   Chemicals   Limited   indicated   its  decision  not  to  submit  the  financial  bid.  M/s  Zuari Industries Limited submitted their financial bid. s were invited.  The  date  of  submission of  the  bids was  8/2/2002  at 11  AM.  Out of  the  4  Qualified Interested Parties who had completed their due diligence two parties namely, M/s Tata  Chemicals  Limited  and  M/s Zuari  Limit

 

14.       The   Cabinet  Committee  on  Disinvestment   decided on 14.2.2002 to accept the bid of Rs 151.70 crores of  M/s Zuari Maroc Phosphates Private Limited.

 

15.    Employees of PPL were agitating for wage revision at the time of accepting bids as wage revision due w.e.f. 1997 had not been affected due to the health of the company.

 

16.    The new management had assured that revision of pay scales would be implemented within 30 days of their becoming strategic partners and that they would finalise the modalities of payment of arrears within 90 days.  The new management has implemented the revised wages w.e.f. March  2002.

The revision would mean:

 ·        Average increase of Rs. 2789 per month for 1140 regular employees.

·        Average salary to go up from Rs. 9360/- to Rs. 12419/- p.m. (increase of about 28.74%.)

·        Additional financial burden of Rs. 31.61 lakh per month (approx.  Rs. 3.79 crore per annum).

 

17.    Since inception, PPL’s plants had produced raw material at 40% of plant capacity which are now working at 110% capacity.  The production of fertiliser has gone up from 20000 metric tonnes to 70000 metric tonnes  in May-June 2002 which is 120% of rate capacity.

 

 

*********