The finance ministry has favoured the divestment of loss-making Madras Fertiliser Ltd, a joint sector company in which National Iranian Oil Company holds a 25.77 per cent stake.
The ministry has asked the department of fertiliser to aim at disinvesting the company in favour of a strategic investor but with no promise of any change in the fertiliser pricing policy.
The DoF has proposed a restructuring package for the company since it feels that its closure will entail an expenditure of Rs 616 crore (Rs 6.16 billion), which will be much less than the restructuring cost.
'The ministry of finance has said that the department should prepare for divestment in the event of a failure of the financial package since past attempts at financial restructuring have not yielded any lasting solution,' said an official.
The Planning Commission had also objected to the restructuring proposal on the same grounds stating that it would provide only a temporary breather aimed at keeping MFL away from the Board for Industrial and Financial Restructuring, the official added.
The Planning Commission instead favours a revamp through business and financial restructuring.