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HOC against sale of Hind Fluorocarbons

Our Bureau

MUMBAI, Sept. 26

HINDUSTAN Organic Chemicals Ltd (HOC) has objected to the sale of its subsidiary, Hindustan Fluorocarbons Ltd (HFL) to Guarniflon S.P.A. of Italy as per the BIFR order.

In a letter to the BIFR, HOC has said that the price of Rs 14.22 crore offered for HFL assets is too low as compared with its valuation of Rs 26.96 crore. The scheme is also against HFL employees as the Italian company has agreed to absorb only 100 emplo yees as against the total 233.

HOC has requested the BIFR to reconsider the rehabilitation proposal for HFL submitted by it. As per the HOC's proposal, 74 per cent of the equity would be divested to a new partner.

The BIFR scheme, which suggested sale of HFL, is based on the report of its operating agency, IDBI. HOC alleged that the IDBI report is biased and ```the operating agency has acted arbitrarily by improper use of its power.''

HFL manufacturers PTFE, a speciality polymer with

applications in electronic industry. The majority stake of 56 per cent equity in the company is held by HOC. Financial institutions including IDBI, IFCI, ICICI and LIC, hold 18 per cent and APIDC 4 per cent. The balance 22 per cent is held by the public.

HOC further alleged that ``Guarniflon proposal is nothing but to protect the interest of the secured creditors by buying over the assets. ``HOCL will not be paid a single rupee against its huge investment of Rs 50 crore.''

Employees of HFL has also opposed to the BIFR scheme. The union has alleged that the choice of the Italian company is done on the basis of the `biased' report of the operating agency.

According to officials, FIFR will take up the case for final hearing next week.

HFL set up with the objective of import substitution for PTFE, suffered heavy losses due to competition from imports and its failure to meet the specific requirements of the domestic consumers.

According to FI sources, the operating agency had shortlisted two companies including Guarniflon of Italy. All the creditors were in favour of the proposal of the Italian company, which agreed to pay all the dues, they said.