Cabinet approves equity infusion of RCF in Talcher Fertilizers Ltd.

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The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has approved the proposal of the Department of Fertilizers for equity investment of Rs.1033.54 crore (+ ) @ 29.67% of the total project cost for setting up a Coal Gasification based fertilizer project in Talcher Fertilizer Ltd. (TFL) by Rashtriya Chemicals & Fertilizers Limited (RCF).

The revival of the Talcher project will ensure huge investment in the fertilizer sector from the Government through PSUs.  This will create job opportunities and also boost the economy of the State and the eastern region.  The revival of the fertilizer unit will also ensure increase in indigenous production of urea leading to greater self-reliance in urea.

Earlier on 12 September 2018, The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given ex-post facto approval for:

I. transfer of land of M/s Rashtriya Chemicals & Fertilizers Ltd. (RCF) to Mumbai Metropolitan Regional Development Authority (MMRDA);
ii. proposal for approval for transfer of land of M/s Rashtriya Chemicals & Fertilizers Ltd. (RCF) to Municipal Corporation of Greater Mumbai (MCGM) and
iii. for selling of TransferableDevelopment Right (TDR) Certificate received/receivable against the transfer of land to MMRDA/MCGM.

The shares of state-run Rashtriya Chemicals and Fertilizers Ltd surged 17.23 pct to Rs 79.60, in their sharpest intraday percentage gain in over three years on 14 September. More than 5.2 million shares changed hands in first 30 minutes of trade, compared with 30-day average of about 1.6 million shares. The stock was the top percentage gainer on Nifty 500 index.

Background:

          TFL, a Joint Venture company of GAIL, RCF, CIL and FCIL was incorporated in November, 2015 with shareholding of 29.67% of GAIL, RCF and CIL each and 10.99% of FCIL to revive the Talcher Fertilizer Plant.  TFL has been formed to set up a coal gasification based fertilizer project at Talcher, District Angul, Odisha.  The share of GAIL, CIL and RCF in the equity of TFL shall be Rs.1033.54 crore (+ 15%) based on the Capex of Rs.11,611.48 crore (+ 15%) for the Goal gasification based fertilizer plant.  GAIL and CIL are both Maharatna Public Sector Enterprises and their Board is competent to approve their equity investment in the Joint Venture company TFL.  RCF is a Miniratna company and its equity investment in the project is beyond the delegated financial powers of its Board.

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