|State to take up paper mills issue with Centre|
GUWAHATI, Sept 15 - The State government is likely to take up the issue of revival of the Hindustan Paper Corporation mills at Jagiroad and Panchgram with the Central government, in perhaps the last ditch effort to avoid liquidation of the paper mills.
In a letter to the liquidator at the National Company Law Tribunal (NCLT), Assam’s Industry Secretary said the State government has “always taken a stand that the closed HPC mills must be revived at the earliest”.
“Due to closure of the mills, over thousands of workers and employees have been rendered jobless. Local economy has also got severely affected,” the letter stated, seeking one month’s time from the NCLT.
“The Chief Minister has been personally pursuing the matter with the highest level in the Central government for revival of the mills and clearance of all dues of the employees and workers,” it stated.
A hearing on the matter was scheduled on September 14, but the NCLT – which has commenced the liquidation proceedings – has deferred it to September 21.
According to an estimate, an amount of Rs 1,900 crore would be required to revive the mills. “This is the amount mentioned by the State government while it had sent a revival package proposal to the Centre long back. The amount is huge. No private player is likely to invest so much if there is no government support,” sources privy to the developments indicated.
If the property of the mills goes under the hammer through the liquidation process of the NCLT, industry department officials feel they are unlikely to fetch more than Rs 500 crore – which will fall short even to repay the creditors who owe over Rs 550 crore. The suppliers credit also stands at a whopping Rs 200 crore, while the Assam government, which is still supplying electricity to the quarters, has to get Rs 200 crore of royalty and other bills. The total liability stands at over Rs 1,200 crore.
The outstanding dues to 1,200-odd employees of the paper mills are around Rs 350 crore, which include salaries for three years.
The Union Ministry of Heavy Industries had floated a tender for 100 per cent divestment of the Government of India stake in Hindustan Paper Corporation Ltd a few years back but no serious buyers evinced any interest. After some vendors and suppliers, who were not cleared their dues for supplies made to the paper mills, approached the NCLT for recovery of their dues, the tribunal first made attempts to sell the units as “going concern” to strategic buyers who were willing to submit comprehensive revival package.
Since there was no result even after around two years of initiation of the exercise, the last resort left to the NCLT was to go for complete liquidation to give relief to the financial institutions and bankers, besides the vendors and suppliers whose dues remain unpaid by the HPC management.
An Indian born NRI billionaire businessman recently showed interest to take over the paper mills, but he later backed out. Another local group had in June submitted a Rs 800-crore revival scheme, about which the State government is not enthusiastic about for reasons best known to it. The NCLT is looking into the scheme.
The HPC also has some 100 residential flats in Kolkata’s Salt Lake area and large company-owned office space at posh location of Park Street of Kolkata. The paper mill at Jagiroad is in a plot of 570 acres, while the Cachar mill has an area of 1,200 acres.