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‘Hindustan Organic Chemicals will be disinvested after assets are sold off’

Under the disinvestment plan, plant and machinery and other movable assets will be disposed of, and employees at Rasayani will be given VRS /VSS
New Delhi: The government has given ‘in principle’ approval for the strategic disinvestment of Hindustan Organic Chemicals Limited (HOCL) after the process of disposing unencumbered land and other assets at Rasayani is completed, Union Minister for Chemicals and Fertilizers, DV Sadananda Gowda said.

Rasayani unit shut down

In a written response filed in the Rajya Sabha on Friday, the minister said that as part of the restructuring plan approved by the government on May 17, Rasayani unit has been closed down and Kochi unit of HOCL is continuing operations.

The company, having units at Maharashtra’s Rasayani and Kerala’s Kochi, has been making continuous cash losses since 2011-12, resulting in acute shortage of working capital

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, had approved a restructuring plan for HOCL, a loss-making and sick public sector undertaking (PSU) under the Department of Chemicals and Petrochemicals in May 2017. The company, having units at Maharashtra’s Rasayani and Kerala’s Kochi, has been making continuous cash losses since 2011-12, resulting in acute shortage of working capital. Most of its plants have remained shut during the last few years. The PSU has not been able to pay regular salary and statutory dues to the employees since February 2015.

The restructuring plan

The restructuring plan involved closing down the operations of all plants at Rasayani unit of HOCL, except for Di-Nitrogen Tetroxide (N2O4) plant. The Di-Nitrogen Tetroxide (N2O4) plant which is to be transferred to ISRO on ‘as is where is’ basis, with about 20 acres of land and employees associated with the plant. The N2O4 plant is of strategic importance as it is the only indigenous source of N2O4 which is used as liquid rocket propellant by ISRO in the space launch vehicles.

The disinvestment plan

Now that the PSU is to be disinvested, plant and machinery and other movable assets will be disposed of, and employees at Rasayani will be given VRS /VSS.

The government has appointed NBCC as Land Management Agency (LMA) for disposal of balance encumbrance free land at Rasayani for discharging its liabilities

As far as land assets are concerned, initially 442 acres will be sold to BPCL and subsequently, the remaining unencumbered land, will unlock the land assets for being redeployed for economically productive investments. The government has appointed NBCC as Land Management Agency (LMA) for disposal of balance encumbrance free land at Rasayani for discharging its liabilities. Gowda further said that no proposal has been received from the Kerala government to take over the Kochi plant of HOCL.