State puts Punjab Alkalies on the block yet again

Ruchika M Khanna

Tribune News Service

Chandigarh, September 16

The council of ministers has decided to go ahead with the disinvestment of Ropar-based caustic soda lye manufacturer, Punjab Alkalies and Chemicals Limited (PACL). This is the fifth attempt to disinvest government stake in the sick public-sector undertaking.

Incidentally, PACL came out of the red after several years in 2018-19, registering a profit after tax of Rs 55. 86 crore. The government had decided to go ahead with its stake sale only after the company achieved its highest-ever sales turnover of Rs 375.73 crore. It may be mentioned that from 2009-10 to 2017-18, PACL had remained a loss-making company, and was thus declared a sick unit.

PACL manufactures caustic soda lye and liquid chlorine and has its unit at Naya Nangal, Ropar. Recently, the state had invested Rs 100 crore for renovation of the plant, mainly replacing furnace-based boilers with biomass-based boilers.

The council of ministers, who met today under the chairmanship of Chief Minister Capt Amarinder Singh, decided to disinvest 90,90,000 shares of the Punjab State Industrial Development Corporation (PSIDC) in PACL. The amount realised from the move would be utilised to pay the debts of PSIDC.

Official sources in the Industries Department told The Tribune that the PSIDC had floated 15 bond issues between 2001 and 2013, raising Rs 610.92 crore as unsecured loans. However, the repayment of Rs 550 crore (principal amount and interest) is overdue and bonds worth another Rs 450 crore will be up for redemption in 2020.

With a liability of over Rs 1,000 crore, against which Punjab Government has given its sovereign guarantee, there is little option for the government but to sell its stake. The PSIDC had invested Rs 30.45 crore into equity capital of PACL by way of initial Public issue and Right Issue (subscribed on premium). The PSIDC stake in the company has reduced from 42 per cent initially to 33.49 per cent now, due to restructuring of the debt liabilities of the financial institutions and public-sector banks.

With the decision to disinvest being okayed by the council of ministers, the government will be appointing a transaction advisor, who will prepare an info pack and the Request for Quotation (RFQ) will be floated to get commercial bids. The state government hopes to sell its stake by completing the entire exercise within this financial year itself. Vini Mahajan, additional Chief Secretary, Industries, said they were hopeful of getting a good strategic investor who would add value to the company and generate employment.