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Facing tough times over the past two years and networth erosion, Sirpur Paper Mills Ltd is set to be put on the recovery path by JK Paper Ltd.
The Committee of Creditors had last month approved a resolution plan of JK Paper and the same was under consideration by the National Company Law Tribunal in Hyderabad.
According to a consolidated report filed by Ram Ratan Kanoongo, Resolution Professional appointed by the NCLT, the resolution plan received 80.66 per cent votes in favour of the Resolution Plan and 19.34 per cent against it. As the CoC has to approve the Resolution Plan by a vote of not less than 75 per cent of voting share, as required under Section 30 (4) of the Insolvency and Bankruptcy Code 2016, the resolution plan of JK Paper was approved.
IDBI Bank, State Bank of India, Central Bank of India, Andhra Bank and Syndicate Bank, voted in favour of the resolution plan.
In the revival moves, the Telangana Government played a pro-active role by offering several incentives for the success of the Resolution Plan as it has a huge bearing on the district and the State economy.
While initially there were at least seven in the fray, the plan was eventually submitted by JK paper, whose proposal received a nod with majority lenders.
West Coast Papers Ltd, Star Paper Mills Ltd, Century Pulp and Paper, Riddhi Siddi Gluco Ltd, Phoenix Arc and OM Metals Infrastructure Ltd were among the companies which evinced interest.
As per the resolution plan, the revival covers a total outlay of ₹782 crore, including settlement of dues of about ₹371 crore against a claim of ₹673.59 crore and investment of about ₹400 crore, towards revival and capacity augmentation.
The integrated paper mill commenced its operations in 1938 under the Nizam rule and was functioning well till about a few years when it began to see downward slide in its business, leading to piling up dues and networth erosion.
On April 2, 2018, BusinessLine had reported that the JK Paper's bid to take over the paper mill is likely to be approved.
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