The Assam government announced on Monday that AIDC on behalf of the Assam govt had purchased two defunct paper mills in the state from PSU Hindustan Paper Corp (HPC) for Rs 375 crore.
The successful bidder was Assam Industrial Development Corporation (AIDC). According to an official statement, the AIDC has taken over the assets of the Nagaon and Cachar paper mills on behalf of the Government of Assam.
In addition, the statement said, “After long and sustained efforts, dialogues and meetings, Assam Government has finally taken over the assets of Hindustan Paper Corporation Limited (HPCL) Nagaon at Jagiroad under Morigaon District; Cachar Paper Mill, Panchgram under Hailakandi district today.”
Moreover, the AIDC had participated in the e-auction process of all the assets, plant, technical area, and township area of the Nagaon and Cachar paper mills in response to a public announcement on February 26, 2022, at a reserve price of Rs 375 crore.
The Assam government has paid Rs 375 crore, which will be distributed by the liquidator in accordance with the Insolvency and Bankruptcy Code (IBC) 2016.
The remaining Rs 700 crore will be used to pay off the debts of HPC employees and workers.
The acquisition, according to Chief Minister Himanta Biswa Sarma, will pave the way for the mill workers’ long-awaited relief.
In the presence of Assam Industries, Commerce, and Public Enterprises Minister Chandra Mohan Patowary, AIDC Managing Director Adil Khan and Moloy Ranjan Thakur authorised person of official liquidator Kuldeep Verma, signed an agreement at the Nagaon Paper Mill complex in the evening.
Meanwhile, a team of AIDC officials took over the assets of Cachar Paper Mill in Panchgram, according to a statement from the Industries and Commerce Department.
The Assam government also intends to develop the land to promote industrial and economic activities in order to accelerate the region’s growth, according to the statement, adding that the total land area of both paper mills is approximately 1,550 acres.
Further, HPC’s Cachar unit in Panchgram shut down on October 20, 2015, and the Nagaon paper mill in Jagiroad shut down on March 31, 2017. Staff at the Cachar and Nagaon units have not been paid since January and March of this year, respectively.
The Assam Cabinet approved a Rs 700-crore relief package for the two paper mills on September 30, last year.
The majority of this sum will be used to pay employee dues, while some will be used to pay bills such as electricity charges.
Previously, an agreement was signed between representatives of the HPC’s officers and supervisors’ associations and workers unions and the Government of Assam, which resulted in the relief package.
The National Company Law Tribunal (NCLT) directed the initiation of Corporate Insolvency Resolution Proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 against the HPC in June 2018, after it submitted a Rs 1,995-crore revival proposal to the government.
During the case’s hearing, the NCLT ordered the liquidation of the HPC’s two mills, despite the BJP-led state government’s repeated promises to reopen the two plants since former Chief Minister Sarbananda Sonowal entered power in 2016.
Following the failure of all options for revival after several rounds of meetings with all stakeholders and a number of hearings, the NCLT on April 26 last year ordered the Liquidator to sell the entire HPC in accordance with the decision of the National Company Law Appellate Tribunal (NCLAT).
During the auction, HPC’s entire asset portfolio was auctioned off, including the two mills in Nagaon and Cachar, residential flats in Guwahati, Kolkata, and Mumbai, office assets in Kolkata and New Delhi, and a massive amount of inventory such as coal, unslaked lime, bamboo, and limestone.
The reserve price for bids was initially set at Rs 1,139 crore, but no bidders came forward. The price was reduced several times before the Assam government purchased the mills for Rs 375 crore.
MLA Akhil Gogoi’s view on the Cancelled Auction of Defunct Paper Mills last year
MLA Akhil Gogoi wrote to Prime Minister Narendra Modi on June 7th, 2021, asking him to reconsider the Centre’s proposal to auction the two state-owned, now-defunct Hindustan Paper Mill Corporation Limited (HPMCL) mills.
The two paper mills, Cachar Paper Mill in southern Assam’s Hailakandi and Nagaon Paper Mills in central Assam’s Morigaon district, have been defunct since 2015 and 2017, respectively, and will be auctioned off on June 15 2021 to liquidate their assets.
“The Bharatiya Janata Party was kind enough to recognise the plight of these industries. In April 2021, promises were made that the BJP-led government in Assam will not only revive the paper mills but augment production, increase bamboo production in Assam and scale-up paper distribution all over India,” the independent MLA from Sibsagar said.
Gogoi further added that this was a source of great joy not only for those afflicted employees but also for Assam’s industrial prospects.
However, the most recent notice for an e-auction would be a severe setback to all of those promises.
Mr Gogoi wrote in the letter, “I hope you would look into the matter urgently so that the e-auctioning of the Nagaon and Cachar Mills could be cancelled,” emphasising that the two plants were symbols of modern Assam’s economic prosperity after the oil and tea sectors.
The closure of the two mills has leftover 1,200 employees stranded due to non-payment of monetary dues.
The National Company Law Tribunal (NCLT) directed the initiation of Corporate Insolvency Resolution Proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 against HPC, which had previously submitted a 1,995-crore revival proposal to the government in June 2018.
During the hearing, the NCLT ordered the liquidation of the two paper mills, despite the fact that the BJP-led state government had promised to revive the two plants since former Chief Minister Sarbananda Sonowal took office in 2016.
However, following several rounds of meetings with all stakeholders and a number of hearings, the NCLT on April 26 ordered the liquidator to sell HPC in accordance with the National Company Law Appellate Tribunal’s decision (NCLAT).
Also Read: TWO PAPER MILLS OF ASSAM TO BE SOLD AT E-AUCTION ON DECEMBER 24