Cabinet Approves Shutting Loss Making PSU Hindustan Fluorocarbons; Employees To Be Given VRS

The Union Cabinet approved shutting of the loss making Public Sector Undertaking (PSU) Hindustan Fluorocarbons Limited (HFL), reports Livemint.

Union Minister Prakash Javadekar said the Cabinet Committee on Economic Affairs (CCEA) has approved HFL's closure. HFL comes under the Central Public Sector Enterprise (CPSE) under Department of Chemicals & Petrochemicals.

"CCEA approves closure of HFL, a central public sector enterprise under the department of chemicals and petrochemicals," an official statement said.

"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.

Since 2013-14, HFL has been a loss making entity and currently it has negative net worth. As on March 31, 2019, the accumulated losses by this PSU stands at Rs 62.81 crore and net worth of (-) Rs 43.20 crore.

The decision to close HFL was due to unviable scale of operations. The plants were very old and running on obsolete technology. Moreover, the only revenue generating product it manufactured, had no strategic significance. From an economic perspective this company was unsalvageable and revival of HFL was not a economically sound option.

As per reports, 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 sum also includes 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.