Kottayam: The ownership of the sick public sector newsprint company on the banks of Muvattupuzha River in central Kerala is set to change hands. The National Company Law Tribunal (NCLT) has issued orders to hand over Hindustan Newsprint Ltd (HNL) at Velloor in Kottayam district to the Kerala government.
The NCLT instructed to sell the shares of the central public sector enterprise at Rs 25 crore to the state government, while rejecting the objection put forth by the Union Ministry of Heavy Industries.
Official liquidator Kuldeep Verma informed the tribunal that it was profitable to sell the HNL shares for Rs 25 crore to Kerala. However, the Union Ministry had sought more money for the shares even on Monday.
The state government can take over the company within three months by paying Rs 25 crore.
The state government intervened after the Centre decided to privatise the HNL, which has about 1,500 workers. The company has been shut for more than a year and the last salary was disbursed on November 2018.
Captive unit
The HNL would now become the captive unit of the Kerala government. All the paper needed for government's requirements could be manufactured at the Velloor company. The requirement of the state-owned Kerala Books and Publications Society would also be met thus.
Next step
As the new director board and chairman take charge only after the money owed to the creditors is settled, the next step is to hand over the Rs 25 crore, thereby ending the liquidation process.
The company management has been instructed to call a meeting of all the establishments that had given loans to the HNL and pay off the liabilities.
The company has a debt of over Rs 430 crore. The government plans to go for a one-time settlement to resolve this.
It is yet to be decided as to what model the company would follow. Chief Minister Pinarayi Vijayan would soon chair a meeting. A Cochin International Airport Ltd (CIAL) model company with public-private participation is also under consideration.
Development on the cards
With the government taking over the HNL, decks have been cleared for not only revitalising the company but also for the overall development of the Velloor region.
The Public Sector Restructuring and Internal Audit Board (RIAB) has submitted a report to the government for revitalising the company.
The government is likely to grant an interest-free loan of Rs 50 crore for revitalising HNL. The government would also stand surety for availing a Rs 150-crore loan.
300 acres for industrial park
The 300 acres of the HNL's 692 acres would be given for the industrial park on lease. This would help the company find funds to the tune of Rs 300 crore. The excess land can be used for tourism and business projects.
The road-rail connectivity and the adjacent Muvattupuzha River would work in favour of the park.
The manufacturing unit is situated on 692 acres of land. It also has a township that includes the staff quarters and a supermarket. The value of land alone is at Rs 549 crore.
Aging equipment
The company currently has equipment and machinery that are 35 years old. These can be used for another 15 to 20 years. After that, more investments would have to be made to refurbish the equipment.
The Hindustan Newsprint Factory began functioning on February 26, 1982. Its factory can manufacture one lakh tonnes of newsprint every year.
New lease of life
Employees have said that the latest decision has given them a new lease for life.
K S Sandeep, secretary of Kerala Newsprint Employees’ Union (CITU), said that the state government's intervention has renewed their hopes. "The employees had not been getting salary for nearly 13 months and the decision has come as a huge relief for them," he added.
M P Raju, general secretary of HNL Employees' Association, said that the company should continue to remain in the public sector. "The Kerala government should take over it and disburse all the benefits of the workers. The HNL should be opened soon," he added.
