The government today approved a restructuring plan of loss-making PSU Hindustan Organic Chemicals Ltd (HOCL) with an financial implication of Rs 1,008.67 crore.
As per the restructuring plan, HOCL's non-viable unit at Rasayani (Maharashtra) will be closed down except di-nitrogen tetroxide (N2O4) plant, which will be transferred to ISRO.
The Cabinet Committee on Economic Affairs (CCEA) approved a restructuring plan for HOCL, a sick central public sector enterprise under the Department of Chemicals & Petrochemicals, Power Minister Piyush Goel told reporters here.
HOCL has units at Rasayani (Maharashtra) and Kochi (Kerala). Most of its plants have remained shut during the last few years.
The company has been making continuous cash losses since 2011-12 and it could not pay regular salary and statutory dues to the employees since February, 2015.
The N2O4 plant will be transferred to ISRO on 'as is where is' basis, with about 20 acres of land and employees associated with the plant.
This plant is of strategic importance as it is the only indigenous source of N2O4, which is used as liquid rocket propellant by ISRO in space launch vehicles.
"Financial implications of the plan is Rs 1,008.67 crore (cash) which is to be met partly from sale of 442 acres HOCL land at Rasayani to Bharat Petroleum Corporation Ltd (Rs 618.80 crore) and the balance (Rs 365.26 crore) through bridge loan from the government," the statement said.
The funds will be utilised to liquidate the various liabilities of the company. The liabilities include payment of outstanding salary and statutory dues of employees and repayment of government guaranteed bonds of Rs 250 crore due for redemption in August-September 2017.
HOCL will repay the bridge loan amount and other government liabilities from the disposal of remaining unencumbered land and other assets of Rasayani unit.
The restructuring plan will enable HOCL to close down the operations of non-viable plants at Rasayani unit while transferring the strategically important N2O4 plant to ISRO to ensure continuity of manufacture and supply of N2O4 for ISRO's space programme, the statement said.
"Interest and welfare of employees will be addressed by payment of all their outstanding salary dues," it added.
The disposal of land will unlock the assets for being redeployed for economically productive investments and thereby creating new employment generation opportunities.