Eight contenders have thus far registered with the implementation secretariat, a body constituted by the Andhra Pradesh government to supervise the public enterprise reform process, to acquire the government's 25.88 per cent stake in Godavari Fertilisers and Chemicals Ltd.

Coromandel Fertilisers, Kribhco, Zuari, Deepak Fertilisers, Spic group's Sical, the city-based Krebs Biochemicals, South Africa-based Fosker Ltd and a Tunisian company are the interested parties. The two foreign companies supply raw material to fertiliser firms.

Coromandel Fertilisers, part of the Chennai-based Rs 4,500-crore (Rs 45 billion) Murugappa group, is believed to be keen and has already acquired a 14.26 per cent stake in GFCL through market purchases.

Though the sell-off process is expected to see a keen competition, the interest shown by Kribhco, which is an associate company of Iffco, is perturbing some of the contenders.

"Being a joint venture partner, Iffco holds 24.9 per cent stake in GFCL. Kribhco's participation in the bidding process gives an impression that Iffco will continue to be interested in GFCL. This is not a comfortable situation for a newcomer, other than Kribhco, since it may not provide full management control over GFCL in the post disinvestment scenario," feels one of the contenders.

The firms also seem to be concerned about the Rs 80-crore (Rs 800 million) odd sundry debtors, particularly a Rs 20 crore (Rs 200 million) receivable from a state government, at the end of the year.

However, GFCL's board is yet to approve its financial results for the year ended March 31, 2003. It is not yet clear whether the company will be able to declare results before June 21, the last date for submission of bids.

For the nine months ended December 2002, it posted a net loss of Rs 5.10 crore (Rs 51 million) on a sales of Rs 535 crore (Rs 5.35 billion). For the full year, the net loss is expected to be over Rs 15 crore (Rs 150 million).

Despite these uncertainties, the IS officials are optimistic on getting a good response for the divestment process in view of GFCL's locational advantage, excellent infrastructure and future business prospects.

With its manufacturing unit located at the coastal town Kakinada, GFCL has a capacity to produce 8.32 lakh tonnes of di-ammonium phosphate and other chemical fertilisers per annum.

It enjoys a market share of about 68 per cent in Andhra Pradesh's DAP market and has a good presence in Madhya Pradesh, Maharashtra and Karnataka. GFCL has a paid-up capital of Rs 32 crore (Rs 320 million) and its networth stood at Rs 74.86 crore (Rs 748.6 million) as on March 31, 2002.