Restructuring plan for sick PSU HOCL

The Cabinet Committee of Economic Affairs (CCEA) on Wednesday approved a restructuring plan for lossmaking, state-owned Hindustan Organic Chemicals Ltd (HOCL).

Under the plan, worth ~1,008.67 crore, one of the two HOCL plants will be shut down.

HOCL has units in Rasayani (Maharashtra) and Kochi (Kerala). Most of its plants have remained shut during the past few years. According to the restructuring plan, HOCL's unit at Rasayani will be closed down while that unit’s di-nitrogen tetroxide plant will be transferred to the Indian Space Research Organisation.

A statement issued by the Press Information Bureau said the company has been making losses since 201112, resulting in acute shortage of working capital. “It could not pay regular salary and statutory dues to the employees since February 2015,” it said. “Financial implication of the plan is ~1,008.67 crore (cash) which is to be met partly from sale of 442 acres of HOCL land at Rasayani to Bharat Petroleum (~618.80 crore) and the balance (~365.26 crore) through a bridge loan from the government,” the statement said. The funds will be used to liquidate the various liabilities, including payment of outstanding salary and statutory dues of employees and repayment of government guaranteed bonds of ~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 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.