In a stark reminder of the problems being faced by several state owned entities in the infrastructure space on account of shortage of gas and high cost of imported RLNG, National Fertilizers (NFL) has threatened to shut down all its plants by end of October if the government does not immediately clear a pending subsidy of Rs 2000 crore.

NFL has already exhausted its working capital limit of Rs 1200 crore annually making it ineligible for banks loans.

“We have informed the government about our dismal financial position. The subsidy has been pending for the last six months and the banks have also refused to fund us as they are facing a liquidity crunch,” Neeru Abrol, chairman and managing director of NFL was quoted in The Financial Express.

NFL has two manufacturing plants each in Punjab and Madhya Pradesh, and one in Haryana with a combined capacity of 3.5-3.7 mtpa. The company’s three fuel oil-based units have converted to gas-based production at a cost of Rs 4,066 crore. With this, all the five urea manufacturing units of the company have become gas-based units from 2013-14.