22 March 2019: Time is running out for Matix Fertilizers and Chemicals, country’s maiden coal bed methane gas-based fertilizer plant set up by Nishant Kanodia, son-in-law of Ravi Ruia.
The promoters have asked its bankers for time as repayments can start only after the plant becomes operational following beginning of supply of CBM gas from Essar Oil and Gas Exploration’s fields in Ranigunj.
Matix promoters would be able to arrange fresh loans to repay old debt only after the plant starts operations with the resumption in the supply of the fuel, the company has told the insolvency court.
The 3 million-tonne-a-year plant has defaulted on its Rs 4,305 crore debt burden as it turned idle due to want of fuel, and its banker IDBI Bank has dragged it to the insolvency court.
Expressing helplessness, Matix has now told the Kolkata-bench of National Company Law Tribunal that “every effort is being made for making the company functional and upon operation of the company it can manage funds from other financiers”.
GAIL officials had earlier told DNA Money that its pipeline, part of the Pradhan Mantri Urja Ganga pipeline that would carry the gas from Essar Oil and Gas Exploration’s CBM fields to Matix’s plant, is expected to get commissioned by July.
The CBM production reportedly fell short of Matix’s requirements while Essar officials had maintained that Matix’s own production wasn’t stabilised and the company had even supplied CBM for pre-commissioning activities of Matix.
In 2018 the Ruias controlled Essar Oil and Gas Exploration signed pact with GAIL for selling its coal bed methane gas for a locked in price for assured offtake for 15 years.
But Matix’s plant couldn’t be run as “one of the main ingredients like gas supply was not resumed by the supplier due to certain pending sanction of statutory authorities and every effort is being taken for making the company functional”, Matix has told the court.
Rating agency CARE downgraded Matix to default category has the company failed to commercially commence production due to non-availability of feedstock about two years back.
STARVED OF FUEL
- Matix promoters say they would be able to arrange fresh loans to repay old debt only after the plant starts operations with resumption of fuel supply
- The 3 million-tonne-a-year plant has defaulted on its Rs 4,305 crore debt burden as it turned idle due to want of fuel