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CCEA approves closure of Hindustan Fluorocarbons plant in Telangana
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved Closure of Hindustan Fluorocarbons Limited (HFL) with just 88 employees.
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved Closure of Hindustan Fluorocarbons Limited (HFL) with just 88 employees. The CCEA chaired by Prime Minister Narendra Modi approved shutting down the operations of the plant and unit of Hindustan Fluorocarbons Limited (HFL) and closure of the company.
Briefing the media after the cabinet meeting, Information Minister Prakash Javadekar said that the company was not operational and the decision only means an official closure of the public sector unit.
HFL, a loss-making company
HFL has been making losses since 2013-14 and has negative net worth and as on March 31, 2019, the company had accumulated losses of Rs62.81 crore and net worth negative (-) Rs 43.20 crore. It was also registered with the erstwhile Board for Industrial and Financial Construction (BIFR) as a sick company.
Government Grant
The government granted an interest-free loan of over Rs77.20 crore to HFL for expenditure exclusively on closure. A cabinet statement read financial implications of the proposal for the closure involve providing support of Rs77.20 crore to the company in the form of an interest-free loan for settling closure related liabilities of HFL. The liabilities include implementation of VRS/VSS, payment of outstanding salary and statutory dues, and repayment of SBI working capital credit and salary/wages and administrative expenses of HFL skeletal staff to be retained for implementing the closure plan for two years.
The interest-free loan is proposed to be repaid from the proceeds of the disposal of land and other assets of HFL after settling all the liabilities relating to the closure of the company. If the land/assets sale proceeds are not sufficient to fully repay the loan amount, then the balance loan amount is to be written off.
NBCC (India) will be appointed as a land management agency for facilitating disposal of land assets. Disposal of plant/machinery and movable assets will be done by HFL through e-auction by MSTC Ltd.
Hindustan Fluorocarbons Limited (HFL)
HFL is a Central Public Sector Enterprise under the Department of Chemicals and Petrochemicals. It was incorporated on July 14, 1983, as a subsidiary company of Hindustan Organic Chemicals Ltd (HOCL). HFL has only one plant located at Rudraram, District Sangareddy in Telangana. It started commercial production in 1987 and was engaged in the manufacture of Poly Tetra Fluoro Ethylene (PTFE) and of Chloro Di Fluoro Methane (CFM-22).
