Board for Reconstruction of Public Sector Enterprises recommends Rs 257 cr package for NEPA

NEW DELHI: The Board for Reconstruction of Public Sector Enterprises ( BRPSE) has recommended a financial package of Rs 257 crore to nurse back to health the sick newsprint unit NEPA.

The suggestion has been made to NEPA's administrative ministry, the Department of Heavy Industry.

The move comes 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 per cent in NEPA.

"The Board has suggested to 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)," an official told PTI.

Besides, it recommended sanction of non-plan loan of Rs 22.48 crore towards cash loss from production for the first year of production, he added.

In 2010-11, the losses of the Madhya Pradesh-based company were Rs 70.40 crore.

BRPSE has also suggested Rs 60 crore for implementing Voluntary Retirement Scheme (VRS) for 400 employees.

The company employed 1,355 regular employees, including executives 178 and non-executives 1,177, as on March 31, 2010.

Further, BRPSE has said that NEPA's interest and statutory dues worth Rs 304 crore should be waived off.

NEPA, which pioneered manufacturing of newsprint, commenced production in April 1956 with an installed annual capacity of 30,000 tonne through sourcing raw materials from captive Salai wood and bamboo.