The Board for Reconstruction of Public Sector Enterprises (BRPSE) recommended a financial package of Rs 257 crore to revive the sick newsprint unit NEPA. The initiative was taken after the government shelved its plan to divest majority stake in the company and revive it through a joint venture with the private sector.
The government holds 97.75% in NEPA. BRPSE also favoured the waiving off NEPA's interest and statutory dues worth Rs 304 crore.
The Board for Reconstruction of Public Sector Enterprises suggestion was made to NEPA's administrative ministry, the Department of Heavy Industry.
BRPSE suggested the department to infuse Rs 175 crore in the form of fresh equity to meet part-finance of total expenditure of Rs 318 crore for Revival and Mill Development Plan (RMDP).
It also recommended sanction of non-plan loan of Rs 22.48 crore towards cash loss from production for the first year of production.
The Madhya Pradesh-based company suffered a loss of Rs 70.40 crore in 2010-11.
BRPSE also suggested Rs 60 crore for implementing Voluntary Retirement Scheme (VRS) for 400 employees.
NEPA, which pioneered manufacturing of newsprint, commenced production in April 1956 with an installed annual capacity of 30000 tonne through sourcing raw materials from captive Salai wood and bamboo. The company employed 1355 regular employees, including executives 178 and non-executives 1177, as on 31 March 2010.
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