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Decks being cleared for reopening of Punalur mill

Our Bureau

THIRUVANANTHAPURAM, Sept. 6

THE prospects for the reopening of Punalur paper mill, which has been lying closed for nearly 14 years, have brightened with most of the key issues in the way of a final settlement being sorted out.

At a high-level meeting convened by the Industries Minister, Mr P.K. Kunhalikutty, here, the representatives of the financial institutions informed that they had come to an understanding with the management on the settlement of liabilities, according to Mr Kunal Dalmia, Director of the company.

The State Government has also ``in principle'' agreed to the concessions sought by the management for the reopening of the mill. However, the meeting decided to prepare a package in this regard and submit it to the State Cabinet for final clearance, he s aid.

Financial institutions, namely, ICICI, IFCI, IDBI and Canara Bank, have agreed to settle their outstandings by taking only the principal amounts, he said. In the case of IDBI, the settlement would be for the principal amount of Rs 50 lakh as against the original claim of Rs 6 crore.

While ICICI had agreed to settle for the principal amount of Rs 2.23 crore, overlooking the total liabilities to up to Rs 16 crore till 1985-86, it had asked the management to pay security expenses of Rs 94 lakh, he said. The management, however, did not agree to the payment of security expenses and the State Government had asked ICICI to sort out the issue within 10 days, he added.

In the case of Canara Bank, the settlement amount has been worked out at Rs 4.46 crore. The amount would still come down to Rs 3.74 crore in case the bank guarantee of Rs 72 lakh, issued to the Chief Conservator Forests, was returned, he said.

The settlement in respect of IFCI would be Rs 1.91 crore. The meeting decided that the Dalmias would settle all the dues to the financial institutions within three months from the date the State Government clears its concession package.

On the part of the State Government, it has agreed to the payment of Rs 44 lakh as actual energy charges as against a claim of Rs 19 crore by the State Electricity Board. This will be under deferred payment in instalments with simple interest, he said.

The State Government was also in favour of extending concessions in respect of sales tax and land tax after reassessments, he said. But, a final decision on these will be taken by the State Cabinet.

As for the raw materials, the State Government will supply them in required quantity at the same rate applicable to Hindustan Newsprint Ltd. A long-term agreement in this regard would be executed between the State Forest Department and the management.

It was estimated that fresh investments up to Rs 100 crore would be needed to make the company resume operations. A non-resident group has agreed to contribute a part of the required amount along with the Dalmias. The balance would be raised from venture capitals and overseas corporate bodies, he added.