JK Papers may take over Sirpur Paper Mills at Rs 628-crore

By 09 Apr 2018

Telangana-based Sirpur Paper Mills’s (SPM) revival might be around the corner. According to media reports, the Government of Telangana "may" accept JK Paper’s Rs 628-crore offer.

Harsh Pati Singhania, vice-chairman and managing director, JK Paper

Started by the Nizam rulers of Hyderabad, SPM located at Kaghaznagar, is one of the oldest paper mills in India and was considered to be the country’s largest manufacturers of pulp, paperboard and a variety of other papers. It shut down operations in October 2014 due to rising input costs, mainly raw materials.

A few weeks earlier, the state government issued a Government Order (GO) with a slew of tailor-made concessions which usually applies to mega projects.

According to a leading daily, this includes 100 per cent gross State GST reimbursement for 10 years and 100 per cent exemption on stamp duty. The government is also said to have offered the exemption of electricity duty for 10 years in addition to reimbursement of power cost at Rs three per unit for three years.

The concessions continue with capital subsidy at 20 per cent of investment subject to a maximum of Rs 50-crore, the supply of coal at a concession of Rs 1,000 for 10 years, interest subvention of two per cent per annum on the amount of new investments for five years.

Importantly, the company will be a preferred supplier of copier/maplitho to Telangana government at market rates.

While speaking to the media, Jayesh Ranjan, principal secretary and commissioner for industrial promotion, Telangana said, “The takeover of the plant is at the advanced stage. The lenders headed by IDBI are in the process of finalising their approvals. We expect the takeover by the month-end.”

The news has been reportedly welcomed by the locals in Sirpur especially more than 3,000 workers of the sick company.

The GO is also said to mention that JK Paper has assured of protecting direct jobs of 1,200 staff and workers plus contract workers who are numerically equal. The industry has also promised in its proposal to provide livelihoods to about 10,000 families by use of its expertise in the plantation of trees.

Earlier in January, the company which is under the Corporate Insolvency Resolution Process, received ‘expression of interest’ from ITC Group, JK Paper, West Coast Paper Mills and Kolkata-based Kohinoor Group.

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