New Delhi: The Union Cabinet on Wednesday approved closure of Hindustan Fluorocarbons Ltd (HFL), a central public sector enterprise with just 88 employees.
The decision was taken in a meeting of Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi.
"CCEA approves closure of HFL, a central public sector enterprise under the department of chemicals and petrochemicals," an official statement said.
HFL has been making losses since 2013-14 and has negative net worth. As on March 31, 2019, it had accumulated losses of Rs 62.81 crore and net worth of (-) Rs 43.20 crore.
It was also registered with the erstwhile Board for Industrial and Financial Construction (BIFR) as a sick company.
According to the statement, financial implications of the proposal for the closure involve providing a support of Rs 77.20 crore to the company in the form of 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.
It said 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 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, it said.
"With unviable scale of operations, very old plants and technology and only one revenue earning product but of no strategic significance, sustainable revival of HFL is not economically viable," it said.
Further the inevitable reduction in quota of HFL in 2020 will make the company's operations completely non-viable from March this year onwards.
"Closure of the company's operations will not only avoid any future risks / liabilities but also protect the interest and welfare of HFL employees by separating them through VRS/VSS," it added.
Thereafter, it said disposal of the company's land assets will enable their redeployment for more productive use which can attract both domestic and foreign investments.
The statement said NBCC (India) will be appointed as 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, it added.
HFL, which is a subsidiary of Hindustan Organic Chemicals, is engaged in the manufacture of Poly Tetra Fluoro Ethylene and Chloro Di Fluoro Methane.