In a major development, the National Company Law Tribunal (NCLT) has approved the proposal for the revival of Sirpur Paper Mills in Telangana, state Industry Minister KT Rama Rao said on Thursday.
With this, JK Paper Ltd will take over the 80-year-old mill located in Kaghaznagar town in Komaram Bheem Asifabad district.
The state government extended certain incentives to JK Paper Ltd, which had submitted the proposal to revive the mill.
Expressing his happiness over this development, Rama Rao said that Telangana government has been putting consistent efforts to revive the sick units in the state.
JK Paper had come up with Rs 628 crore resolution plan and the lenders headed by IDBI had recently approved it.
The revival will help protect the jobs of over 1,200 employees directly engaged with the integrated paper mill. According to an official statement, once reopened the mill also create indirect employment opportunities for 4,000 people.
Local legislator Koneru Konappa said that the latest development has rekindled hope in the town, whose economy had collapsed due to the factory's closure.
The Sirpur Paper Mills, an integrated paper and pulp mill, was set up in 1938 by the Nizam, the ruler of then Hyderabad State. It was then the country's largest manufacturer of pulp, paperboard and other products.
However, the company over last few years turned sick and shut down operations in 2014.
According to former employees, the townâ€™s name â€“ Kothapet â€“ was changed to Kaghaznagar after the mill was set up. The economy of the entire area collapsed when the mill downed shutters.
With no source of income, many mill employees had turned to daily wage jobs. Four people have died since the mill closed, including one person who set himself on fire.
It was under the Corporate Insolvency Resolution Process as per the provisions of the Insolvency and Bankruptcy Code, 2016. The resolution professional appointed by NCLT in 2017 invited Expression of Interest for resolution plans.
In March this year, the Telangana government had issued a Government Order (GO) which said that it was offering tailor-made concessions to JK Paper Limited, which had submitted a proposal to revive the closed mill.
The concessions included 100% gross State GST reimbursement for 10 years and 100% exemption on stamp duty, besides raw material for the paper like debarked eucalyptus and subabul to be made available for 10 years at a concessional rate.
The state government said that the coal would also be supplied with a concession, while all consents and licenses to operate the mill would be made available swiftly.