Coal India Executes Sponsor Support Undertaking for Talcher Fertilizer's Rs 12,250 Crore Loan Facility
Coal India Limited (CIL) has executed a Sponsor Support Undertaking for Talcher Fertilizer Limited (TFL), a joint venture aimed at reviving the Fertilizer Corporation of India Limited's unit in Talcher, Odisha. The undertaking is a pre-requisite for TFL to receive a Rupee Term Loan Facility of approximately Rs 12,250.00 crores. CIL, acting as a sponsor but not a guarantor, stated there are no financial implications for the company. The project involves setting up a coal gasification-based fertilizer plant, marking a significant step towards enhancing India's fertilizer production capabilities.

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Coal India Limited (CIL), a Maharatna company, has taken a significant step in supporting the revival of India's fertilizer sector. The company has executed a Sponsor Support Undertaking (SSU) for Talcher Fertilizer Limited (TFL), a joint venture aimed at reviving the Fertilizer Corporation of India Limited's (FCIL) unit in Talcher, Odisha.
Key Details of the Undertaking
Aspect | Details |
---|---|
Joint Venture Partners | GAIL (India) Ltd., Coal India Ltd., Rashtriya Chemicals & Fertilizers Ltd., and Fertilizer Corporation of India Limited |
Purpose of SSU | Pre-requisite for TFL to receive a Rupee Term Loan Facility |
Loan Amount | Approximately Rs 12,250.00 crores |
CIL's Role | Sponsor, not a guarantor |
Financial Implications for CIL | None stated |
Project Overview
TFL was incorporated on November 13, 2015, with the primary objective of reviving FCIL's fertilizer unit. The project involves setting up a coal gasification-based fertilizer plant in Talcher, Odisha, marking a significant step towards enhancing India's fertilizer production capabilities.
Coal India's Stance
Coal India has clarified that while it has executed the SSU, it is not acting as a guarantor for the loan facility. The company emphasized that there are no financial implications for CIL arising from this undertaking. This move aligns with the government's broader strategy to revive defunct fertilizer units and boost domestic production.
Implications for the Fertilizer Sector
The execution of this SSU is a crucial development for India's fertilizer industry. By facilitating the revival of the Talcher unit, this project is expected to contribute significantly to the country's fertilizer production capacity, potentially reducing import dependence and enhancing agricultural productivity.
Conclusion
The execution of the Sponsor Support Undertaking by Coal India Limited for Talcher Fertilizer Limited represents a strategic move in the revival of India's fertilizer sector. While Coal India's role is limited to that of a sponsor without financial guarantees, this development underscores the collaborative efforts between major public sector entities to strengthen India's industrial and agricultural base.
Historical Stock Returns for Coal India
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
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+0.31% | +1.12% | -2.74% | -2.52% | -20.64% | +238.97% |