FACT plans to sell 170-acre land to BPCL for Rs 500 cr

State-run fertiliser firm FACT is looking to sell 170 acres of its land to BPCL for more than Rs 500 crore to expand and modernise manufacturing capacity.

"The company has around 2,000 acres of land it has been looking to leverage this asset to finance its expansion plans. So now it is set to enter into an agreement with BPCL to sell 170 acres at Ambalamedu in Cochin," a source said.

Source added the land is valued at more than Rs 500 crore so the deal will be around the same amount only. And the funds will be used for expansion and modernisation.

Meanwhile, last week the centre had announced to provide Rs 1,000 crore loan to the FACT. While announcing the decision, Union Fertiliser Minister Ananth Kumar had said that this was being done to ensure smooth supply of fertiliser in the southern states.

FACT, which is facing liquidity crunch, currently produces about six lakh tonnes of NPK fertilisers such as aluminium sulphate with an annual turnover of about Rs 2,000 crore. Kumar had also announced that the government was planning to set up new urea plant with a 1.3 million tonnes of capacity at FACT's current production site. He had also mentioned that the loan would be used for working capital requirement, clearing its pending dues and maximising capacity utilisation.

FACT, which has been facing severe financial crunch for more than a decade, has now got a breather in the form of this loan, which will ease its liquidity crisis.